Facebook's deep pockets

General Discussion
#1

So now they’re buying “Oculus” for a cool $2 Billion.

Oculus doesn’t even have a mainstream product at market. They’ve only existed for two years.

I’ve gotta go back to Disney’s purchase of Lucasfilm. For $4 Billion. Lucasfilm clearly has a mountain of ongoing earnings and a mountain of earnings potential which Disney is exploiting with this new film trilogy. Star Wars 7 will surely be the highest grossing film ever once it has it’s run.

So FB has signed up $19 Billion for an app that at the pace of things may well be irreluvant in two years, and now $2 Billion for a VR technology that may or may not pan out. I sure as hell would not be buying facebook stock. They’re fucking nuts. I will be watching with great interest to see how they morph these acquisitions into colossal earnings.

Disney on the other hand got the bargain of a lifetime comparatively to FB’s lunacy.

And of note is that a co-founder of Oculus was killed last summer. He was hit by a car that was being chased by police. So…does his estate get to pursue the state now for a couple hundred million?

#2

You’re forgetting. Disney paid for lucasfilm with cash and Disney shares. Shareholder dividends. Earnings. Undervalued shares.

Facebook is paying with insanely overvalued FB shares.

Let’s say you that you had $50,000 to buy a car. Then I threw a kink at you…your $50,000 contribution will be matched with another $150,000 by me. You can buy a $50,000 car, and not have access to the $150,000. Or you can buy a $200,000 car and drive a new Hurracan or whatever you want.

What would you do?

Facebook is you. I am the stock market. Whatsapp is the car.

In my example, reality is that whatsapp is a massive brilliant real estate grab in the social sector, that could turn out to be an incredible boon for facebook in holding off Apple and Google in the quest for internet supremacy. Or, it could be a flameout. The good news is that either way, the ‘cost’ was almost nothing.

#3

Isn’t this the way that stasis bought companies? Overvalued stock?

#4

in a way, yes indeed.

The difference being that Facebook shares have been evaluated by millions of market participants, and buyers and sellers have come together to determine each share’s value.

Stasis on the other hand was a privately held company, and unfortunately people sold their businesses (like the one guy who complains a lot) to Stasis in exchange for equity in Stasis. Based on a valuation of Stasis done by…Stasis.

There was also I’m sure plenty of opportunity for Stasis to issue new treasury shares to whomever they wanted, including the controlling shareholders, to further dillute the angry guy.

Remember in ‘the social network’ when they brought in Andrew Garfield (can’t remember his name in the movie) and screwed him the fuck over by having him sign those documents that allowed Zuckerberg to revalue and re-issue other classes of stock, rendering the original class (which his partner owned) worthless? These are the problems you face when investing in the private market. It’s tough to know who to trust, especially when one guy has control and there’s no regulator overseeing things.

#5

Ya that really sucked for him, given his role in starting the company. Two words he should have been aware of at the time: “due diligence.”

#6

or 3 words

get a lawyer

If Zuckerberg has his lawyers asking you to sign docs they prepared a few months after you fuck him over, don’t you think you should maybe have hired your own to review it?

Before you sign anything important, and before you say anything to the police, lawyer up!

#7

haha ya very true. engaging counsel is always the wisest choice.

#8

Facebook is essentially paying for users. Whatsapp is all about international customers, which is a market Facespace is desperate to penetrate. When you first read about it, its shell shocking. But after you look underneath the skirt, this deal makes sense.