Investors who owned stocks in the 2010s generally experienced some big gains. In fact, the SPDR S&P 500's SPY total return since Feb. 19, 2014 is 115.7%.
On that day in history, Facebook, Inc. FB announced a massive buyout of messaging app WhatsApp, which remains its largest acquisition to date.
Facebook’s Biggest Buyout: In 2012, Facebook acquired Instagram for $1 billion in arguably its wisest acquisition to date.
It paid a much more hefty $22 billion price for WhatsApp just two years later.
Instagram has been a massive success for Facebook, but WhatsApp now has 2 billion users — nearly twice as many as Instagram.
At the time the WhatsApp buyout was announced, Facebook shares were trading at around $68 back in early 2014, nearly 80% above its 2012 IPO price.
Facebook was in the early stages of emerging as one of the two largest online advertisers in the world, which has allowed the company to effectively monetize its massive user base.
Facebook got off to an infamously shaky start after it conducted one of the most highly anticipated and initially disappointing IPOs of all time in 2012. But by the time the company splurged on WhatsApp, Facebook has already started to find its stride on Wall Street.
By the end of 2015, Facebook shares were above $100. By early 2017, they had doubled from where they were when the WhatsApp deal was announced in roughly three year’s time.
Despite fears surrounding regulatory crackdowns related to political abuse and data mishandling and potential antitrust action due to Facebook’s business practices, Facebook’s ad business kept churning out record profits and revenues.
After peaking at $218.62 in mid-2018, negative headlines sent Facebook shares back down to as low as $126.85 in late 2018. The stock resumed its rally at that point and ultimately peaked at $224.20 in early 2020 prior to the COVID-19 sell-off.
Facebook In 2020, Beyond: After dipping as low as $137.10 in March 2020, Facebook shares made it as high as $304.67 this year before pulling back to around $284.
Investors who bought $1,000 of Facebook stock on the day the WhatsApp deal was announced back in 2014 would now be holding a stake worth $4,184.
Looking ahead, analysts are expecting more all-time highs from Facebook in the next 12 months. The average price target among the 44 analysts covering the stock is $300, suggesting 5.9% upside from current levels.
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