Wall Street sees sense in Facebook's $24b WhatsApp buy
(REUTERS) - Facebook Inc's purchase of fast-growing messaging startup WhatsApp for an eye-popping US$19 billion (S$24 billion) largely won approval from analysts, who said the deal made strategic sense as it will solidify the social network's position as a leader in mobile.
Facebook shares closed up 2.3 per cent at US$69.63 after falling as much as 3 per cent in early trading as investors got over the initial sticker shock of the deal value.
At least two brokerages downgraded their recommendations on Facebook to "hold" but the overwhelming majority of analysts remain positive on the stock.
Facebook is paying more than double its annual revenue for a chat program that has little revenue. The purchase price is slightly more than the market value of Sony Corp.