Facebook Inc (FB) closes WhatsApp deal, Disney (DIS) to rescue European Disney and Hewlett-Packard (HPQ) splitting company

Bourbon & Bayonets / Monday, October 6th, 2014

Markets were heading lower after news was released that the Facebook Inc. (FB) buyout of the mobile messaging service WhatsApp closed with a price tag of $22 billion today. The original announcement was made in February and received final regulatory approval in Europe. The founder of WhatsApp, Jan Koum will end up receiving nearly $ 2 billion in stock over a four-time span. The popular messaging service has nearly 600 million monthly users. The deal broken down showed that the social media giant paid $4.59 billion in cash and 178 million shares of it’s stock for WhatsApp. The company will remain it’s own entity and house the same strict policy of not collecting users personal data to share with third parties. Jessica Rich, Director of the Bureau of Consumer Protection, said, “Hundreds of millions of users have entrusted their personal information to WhatsApp. The Federal Trade Commission staff will continue to monitor the companies’ practices to ensure that Facebook and WhatsApp honor the promises they have made to those users.”

Shares of The Walt Disney Company (DIS) were trading slightly higher after the company announced they would be helping out the Euro Disney arm. They will be funding a deal that would give the Europe branch $1.3 billion and would give the United States group control over the European theme park. Included in the deal would be rights to a debt-restructuring plan. The current break up of the company is 40% owned by Walt Disney and 10% owned by the Saudi prince AlWaleed bin Talal. The theme park is located a mere 20-miles north of Paris, but has had struggles during the slowing of the economy. They have seen attendance at the park shrink a staggering 700,000 to 800,000 visitors over the last year.

Shares of Hewlett-Packard Company (HPQ) were trading up over 5% after the company announced they would be splitting the company. The business will be separating the computer side of the and their corporate hardware and services operations business. They also reported they would be cutting nearly 5,000 jobs and part of the restructuring plan. Meg Whitman, Chief Executive of the company, said that the HP Inc. side of the company will mainly continue deal strictly with PCs and printers, while aiming focus in other related markets, like 3D printing. She continued to say that they would not be venturing into consumer mobile devices, an area that held them up a few years ago. “There’s still lots of opportunities in other adjancies, where we don’t chase the market leaders,” Whitman said.

That’s all for today,

Warren Gates, Normandy Research

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