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This Day In Market History: Facebook's WhatsApp Purchase Is The Largest Buyout Of A VC-Backed Company

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This Day In Market History: Facebook's WhatsApp Purchase Is The Largest Buyout Of A VC-Backed Company

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened

On Feb. 19, 2014, Facebook, Inc. (NASDAQ: FB) bought the five-year-old WhatsApp for $19.6 billion in cash and stock.

Where The Market Was

The S&P 500 closed down at $1,828.75, and the Dow Jones Industrial Average ended the day at $16,040.56.

What Else Was Going On In The World

Russia was racking up medals on its home course at the Sochi Winter Olympics, and the Ukrainian Revolution had just begun with violent protests.

Facebook Makes A Massive Purchase

Tencent had pursued WhatsApp back in 2014, but health-related hold-ups gave Facebook time to intervene. CEO Mark Zuckerberg doubled Tencent’s intended offer and set a record for the most expensive purchase of a venture-capital-backed firm. At the time, the $19.6 billion sum surpassed the GDPs of 150 national economies.

A few years earlier, Facebook had paid just $1 billion for Instagram, and a year later, it would buy Oculus VR for $3 billion. Some suggest its most expensive purchase was one of its best.

WhatsApp positioned the Facebook brand to penetrate developing markets and top the global communication industry. As of yet, though, the platform has not meaningfully contributed to Facebook’s bottom line.

The parent company recently invested in enhancing WhatsApp services and integrating them into the Facebook ecosystem. Efforts to monetize the platform, including the addition of ads in 2019, are expected to yield revenue this year.

Related Links:

Facebook To Unite Messenger, WhatsApp, Instagram

Are Investors Overlooking Facebook's True Potential?

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