I’m Still Worried About This Potential Facebook Time Bomb


Did Facebook overpay for WhatsApp? Only time will tell. Image source: WhatsApp.

It’s been years, and I still can’t wrap my head around the price tag. Facebook (NASDAQ: FB) shocked investors in 2014 when it announced the massive $19 billion acquisition of WhatsApp, a price tag that ended up increasing to about $22 billion by the time the deal closed, since the deal consisted mostly of stock. I never questioned the strategic validity of the deal, just the financial pragmatism of paying such a massive amount of money for the growing messaging service. As a Facebook shareholder myself, I can’t help but feel anxious every time I look at the balance sheet. That goodwill line item is just enormous.

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