Facebook opens lower on WhatsApp deal

Investing.com - Shares of social network giant Facebook edged lower on Thursday, after the company announced a deal to acquire messaging service WhatsApp in a deal valued at $19 billion.

After markets closed Wednesday, Facebook said it agreed to purchase WhatsApp for $16 billion in cash and stock, plus $3 billion in restricted stock units over the next four years.

WhatsApp has 450 million users around the globe, meaning Facebook paid nearly $42 per user. By comparison, Japanese e-commerce giant Rakuten bought messaging service Viber for $3 per user, in a $900 million deal earlier in the week.

The California-based mobile-messaging application company allows users to send text messages free over the Internet, bypassing wireless carriers that may charge users to send messages over their networks.

“WhatsApp is on a path to connect 1 billion people,” said Facebook founder and Chief Executive Mark Zuckerberg.

WhatsApp co-founder and CEO Jan Koum will join Facebook’s board as part of the deal. Zuckerberg and Koum both said that WhatsApp will continue to operate independently and promised to continue its policy of no advertising.

Facebook shares fell 0.4% after the open to trade at $67.78 per share.

Elsewhere across the sector, shares in Blackberry rose 4.1% to $9.38 as investors were cheered by WhatsApp’s lofty valuation. BlackBerry chief executive John Chen has singled out its BlackBerry Messaging service as a pillar for growth to help revive the struggling smartphone maker.

Meanwhile, Google, which reportedly offered to acquire WhatsApp for $10 billion, saw shares rise 0.3% to $1,206.45.