Facebook has recently made what most people would consider quite a big purchase. That purchase would be none other then the popular Instagram. This big purchase consisted of Facebook paying Instagram $1 billion. Facebook did this by paying $300 million in cash for Instagram and about 23 million shares of common stock. In addition, Facebook has agreed to pay a $200 million termination fee to Instagram if the government happens to block the deal. Facebook hopes to sell the stock for about $31 per share. However, if Facebook’s stock price goes up to $40 — then the company’s market cap could be as high as $104 billion. (This could be a very likely possibility.)
I personally feel now that Facebook has purchased Instagram, even more people will use it. Because now it is made easy and convenient for people without smart Phones or iPod Touches to use Instagram without any conflict or extra technology. Instagram will also have even more attention brought upon it when being associated with Facebook that has billions of daily users.
The filing notes that Facebook bought Instagram “as independent mobile applications to enhance our photos product offerings and to enable users to increase their levels of mobile engagement and photo sharing.” This will be a nice feature for Facebook to add; in turn this could gain even more Facebook users.
I have heard mixed reviews about the big purchase. Many Instagram users were upset because they feel that it will lose its “cool” effect once everyone has it. Other users are glad that everyone can now have the opportunity to use Instagram.