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Facebook buys instagram for $1B
 

Neighbor's picture
IB
(King Kong, 1,236
 
Points)
 on 4/9/12 at 3:11pm
instagram-1.jpg

Well guys i think its about time to give up your dreams of going to wall street and learn how to make an app. Just in the last week or two instagram has sold for $1B and DRAW SOMETHING for $200MM (WTF), with the founders keeping most of the money in both cases.

I think Facebook is bored and just blowing money at this point

From http://online.wsj.com/article/SB100014240527023038...

AppOasis FTW

I didn't say it was your fault, I said I was blaming you.
Tags:
onemanwolfpack's picture

Great, this will spur another

IB
 
Points)
 on 4/9/12 at 2:04pm

Great, this will spur another round of hipsterpreneurs and their shitty Facebook plug-in, pre-rev ideas. To paraphase a recent VC quote I heard: "Everybody wants to spend six months on an minimally viable idea and sell to Google for $20 million"

Ideas that should be worth $1 billion:
-cures for cancer
-alternative energy sources
-technology to feed billions

Ideas that should not be worth one matha-fackin billion greenbacks:
Anything that requires Facebook, Twitter, Google+, etc. to work

EngBanker's picture

onemanwolfpack wrote: Ideas

 
Points)
 on 4/9/12 at 2:07pm
onemanwolfpack:

Ideas that should not be worth $1B:
Anything that requires Facebook, Twitter, Google+, etc. to work

Definitely agree with you. The much anticipated web 2.0 bubble burst should happen soon. I'm getting sick and tired of hearing how every single kid from my graduating class who couldn't find a job is working on an "app start up" and thinks their company is worth > 5mil. Kids who couldn't program to save their life in undergrad are now developing apps...

nychimp's picture

In other news....WSO is going

PE
 
Points)
 on 4/9/12 at 2:08pm

In other news....WSO is going public.

Financial Modeling Training
Interview Guides
WSO Resume Review

Zalachenko's picture

EngBanker

O
(Monkey, 58
 
Points)
 on 4/9/12 at 2:14pm
EngBanker:
onemanwolfpack:

Ideas that should not be worth $1B:
Anything that requires Facebook, Twitter, Google+, etc. to work

Definitely agree with you. The much anticipated web 2.0 bubble burst should happen soon. I'm getting sick and tired of hearing how every single kid from my graduating class who couldn't find a job is working on an "app start up" and thinks their company is worth > 5mil. Kids who couldn't program to save their life in undergrad are now developing apps...

U jelly?

JohnAnthony7's picture

onemanwolfpack wrote: Great,

(Baboon, 152
 
Points)
 on 4/9/12 at 2:15pm
onemanwolfpack:

Great, this will spur another round of hipsterpreneurs and their shitty Facebook plug-in, pre-rev ideas. To paraphase a recent VC quote I heard: "Everybody wants to spend six months on an minimally viable idea and sell to Google for $20 million"

Ideas that should be worth $1 billion:
-cures for cancer
-alternative energy sources
-technology to feed billions

Ideas that should not be worth one matha-fackin billion greenbacks:
Anything that requires Facebook, Twitter, Google+, etc. to work

Very well put. I'm getting tired of this as well. And I thought Magic overpaid for the Dodgers...

TheKing's picture

Company that has never made

O
 
Points)
 on 4/9/12 at 2:16pm

Company that has never made $1 is sold for $1 billion. Just, wow.

Check out my WSO Blog

mongoose's picture

Looks like we are in the

O
(King Kong, 1,028
 
Points)
 on 4/9/12 at 2:18pm

Looks like we are in the wrong industry. No one in Finance will ever make this kind of money.

TheKing's picture

In all seriousness, why would

O
 
Points)
 on 4/9/12 at 2:19pm

In all seriousness, why would they do this. Honestly. It doesn't make sense to me. Instagram does not realistically threaten Facebook and I fail to see how even the most aggressive projections of potential future cash flow could justify this.

"But, but, they have a lot of users." It's a photo sharing service with a filter application. It's not something that can easily be monetized, even through advertisements. Because, realistically, how do you make ads for such a service. Shit, Twitter can't figure out ads, I'm not sure how Instagram will. Then again, I'm not a web 3.5 entrepreneur. It just strikes me as something that could be dead and gone in a few years, simply because people moved on to the next thing. Again, I could be wrong, but this just seems like an impossibly rich valuation based on any sort of (hyper aggressive) FCF analysis.

Check out my WSO Blog

Zalachenko's picture

JamesHetfield wrote: Looks

O
(Monkey, 58
 
Points)
 on 4/9/12 at 2:21pm
JamesHetfield:

Looks like we are in the wrong industry. No one in Finance will ever make this kind of money.

Please, leave WSO. If you're not trolling, there's 2 possibilities; 1. You know NOTHING. 2. Look at number 1.

ITM's picture

No, we are not in the middle

 
Points)
 on 4/9/12 at 2:24pm

No, we are not in the middle of another tech bubble, not at all...

Ravenous's picture

God, I can't wait for the

HF
(King Kong, 1,347
 
Points)
 on 4/9/12 at 2:26pm

God, I can't wait for the bubble to pop so that the valuation of these shitty companies can match underlying fundamentals, i.e., they are worth nothing.

onebuck's picture

Based on today's stock price

O
 
Points)
 on 4/9/12 at 2:26pm

Based on today's stock price the New York Times is worth $947.98mm

http://www.google.com/finance?q=nyt

This is saying Instagram is worth more than the New York Times.... right....

EngBanker's picture

Zalachenko wrote: U

 
Points)
 on 4/9/12 at 2:26pm
Zalachenko:

U jelly?

I'll be "jelly" of the one out of hundred who will actually sell off their company, yes. The other 99 who are still living in their parents basement and don't even qualify for a credit card..........

jordock's picture

They completed a Series B

CO
(Monkey, 31
 
Points)
 on 4/9/12 at 2:34pm

They completed a Series B round at a $500 million valuation only three days ago: http://www.webpronews.com/latest-instagram-valuati...

How does the value of a company double over the weekend?

kmzz's picture

because FB has the cash and u

O
 
Points)
 on 4/9/12 at 2:40pm

because FB has the cash and u dont

Zalachenko's picture

EngBanker wrote: Zalachenko

O
(Monkey, 58
 
Points)
 on 4/9/12 at 2:43pm
ChEM3's picture

jordock wrote: They completed

O
 
Points)
 on 4/9/12 at 2:44pm

Rise early, work hard, strike oil.

jordock's picture

While I'm sure Sequoia was

CO
(Monkey, 31
 
Points)
 on 4/9/12 at 2:48pm
BlackHat's picture

Facebook just openly admitted

HF
 
Points)
 on 4/9/12 at 3:06pm

I hate victims who respect their executioners

Follow BH & Co. on Twitter: @DumbLuckCapital
twitter.com/DumbLuckCapital

Macro Arbitrage's picture

One word: Tulips.

HF
(King Kong, 1,369
 
Points)
 on 4/9/12 at 3:06pm

"I swear, by my life and my love of it, that I will never live for the sake of another man, nor ask another man to live for mine."

TTG413's picture

Facebook now beats Zynga's

IB
 
Points)
 on 4/9/12 at 3:09pm
harvardgrad08's picture

the crazy thing is that

CD
(Gorilla, 606
 
Points)
 on 4/9/12 at 3:31pm
maximumlikelihood's picture

Whether they've been

(Baboon, 174
 
Points)
 on 4/9/12 at 3:32pm

Just Do It

WallStreetOasis.com's picture

Macro Arbitrage wrote: One

EN
(Human, 12,074
 
Points)
 on 4/9/12 at 3:37pm

WSO Conference 2013

Private Certified User Chat

Amphipathic's picture

onemanwolfpack wrote: Ideas

 
Points)
 on 4/9/12 at 3:42pm
Beachbum89's picture

I just downloaded Instagram

IB
 
Points)
 on 4/9/12 at 3:43pm
Human's picture

maximumlikelihood

PE
(King Kong, 1,891
 
Points)
 on 4/9/12 at 3:52pm

"I am the hero of the story. I don't need to be saved."

Ravenous's picture

maximumlikelihood

HF
(King Kong, 1,347
 
Points)
 on 4/9/12 at 3:52pm
SlikRick's picture

TheKing wrote: In all

CO
 
Points)
 on 4/9/12 at 3:56pm
TheKing's picture

Twitter has hundreds of

O
 
Points)
 on 4/9/12 at 4:07pm

Check out my WSO Blog

SpacemanSpiff's picture

So instead of web pages,

HF
 
Points)
 on 4/9/12 at 4:09pm
Ravenous's picture

SlikRick wrote: TheKing

HF
(King Kong, 1,347
 
Points)
 on 4/9/12 at 4:19pm
SlikRick's picture

TheKing wrote: Twitter has

CO
 
Points)
 on 4/9/12 at 4:20pm
Ravenous's picture

The other one is Groupon.

HF
(King Kong, 1,347
 
Points)
 on 4/9/12 at 4:21pm
Ske7ch's picture

The purchase is more for the

O
 
Points)
 on 4/9/12 at 4:23pm

- Bulls make money. Bears make money. Pigs get slaughtered.
- The harder you work, the luckier you become.
- I believe in the "Golden Rule": the man with the gold rules.

SlikRick's picture

Ravenous wrote: SlikRick

CO
 
Points)
 on 4/9/12 at 4:23pm
SlikRick's picture

Ravenous wrote: The other one

CO
 
Points)
 on 4/9/12 at 4:26pm
ASG10010's picture

Ske7ch wrote: The purchase is

(Chimp, 3
 
Points)
 on 4/9/12 at 4:30pm
BillyRay05's picture

SlikRick wrote: TheKing

ST
 
Points)
 on 4/9/12 at 4:32pm

"Sounds to me like you guys a couple of bookies."

Ravenous's picture

SlikRick wrote: Ravenous

HF
(King Kong, 1,347
 
Points)
 on 4/9/12 at 4:37pm
UBmonkey's picture

This is a very smart buy on

O
 
Points)
 on 4/9/12 at 4:37pm
Human's picture

BillyRay05 wrote: "Bro, were

PE
(King Kong, 1,891
 
Points)
 on 4/9/12 at 4:37pm

"I am the hero of the story. I don't need to be saved."

TheKing's picture

From the gigaom

O
 
Points)
 on 4/9/12 at 4:44pm

Check out my WSO Blog

Jackie Chiles's picture

Its like a gold rush. SELL

(Baboon, 145
 
Points)
 on 4/9/12 at 4:45pm

"It's outrageous, egregious, preposterous. "

Irresistible's picture

Instagram is a fad. FB

 
Points)
 on 4/9/12 at 4:51pm
seedy underbelly's picture

One billion for that piece of

IB
(King Kong, 1,090
 
Points)
 on 4/9/12 at 4:55pm
ChEM3's picture

Release an update that says

O
 
Points)
 on 4/9/12 at 5:15pm

Rise early, work hard, strike oil.

Faddy's picture

Zalachenko

(Baboon, 112
 
Points)
 on 4/9/12 at 5:35pm
pointassist300's picture

linkedin is trading at 840

 
Points)
 on 4/9/12 at 6:33pm
Warhead's picture

Ravenous wrote: No need to

IB
 
Points)
 on 4/9/12 at 9:17pm

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