James Spillane
When it acquired Instagram, Mark Zuckerberg suggested that Kevin Systrom think of the value of Instagram as a percentage of Facebook’s market cap. Both agreed, according to Business Insider, that they could see Facebook attaining a valuation of $200 bn, which would make Instagram worth the $2 bn Systrom wanted.
The deal for Instagram was sealed in stock and cash, 70 percent for the former and 30 percent for the latter. The shares were priced at $30 each, implying a company valuation of $75 bn. It was a conservative move for the company, which has been valued at north of $100 bn in private secondary markets.
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Source: Business Insider
Photo: stoneysteiner via Flickr
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This article was written for Business 2 Community by James Spillane.
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