19 billion reasons that numbers stopped making sense in 2014

On the fiftieth day of this year, the numbers started to make our heads explode.

Facebook announced on Feb. 19 that it had agreed to acquire WhatApp for $16 billion. Reporters and readers alike quickly began parsing that number to make sense or nonsense of it: $16 billion worked out to be $35 per user, or nearly $300 million per employee. It was 16X the amount Facebook initially agreed to pay for Instagram in 2012, which was viewed as a jaw-dropping amount at the time.

In reality, $16 billion was somehow too low. The total price tag was $19 billion if you factored in the restricted stock units Facebook kicked in for employees. By the time the deal closed in October, the price tag had inched up to about $22 billion — you know, give or take some negligible but still very large amount of money — as a result of increases in Facebook's stock price during the months in between Read more...

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