The Numbers Are In: How Much Did Facebook’s Instagram Acquisition Cost?

People have been saying “billion dollar deal” because it makes great headlines, but how much did Facebook’s acquisition of Instagram really set the social media giant back?

About $715 million in cash and stock. So, still more money than you or I will likely see in our lifetimes.

Facebook detailed the final purchase information today in its 10-Q. On the books, Facebook’s purchase of Instagram sits at $521 million. That figure comes from the $300 million in cash that was promised by Facebook in addition to the price of 12 million vested shares of Class B common stock. That stock goes to “non-employee stockholders,” (read: investors) instead of to Instagram’s staff.

However, Facebook issued 11 million un-vested shares to Instagram employees, including its founders. Those shares vest over three years and have an aggregate fair value of $194 million. Adding up all those numbers puts the final acquisition price tag at $715 million.

The deal fell short of the projected $1 billion mark simply because Facebook’s stock price has declined since the deal was originally drafted. The original deal was $300 million in cash, and 22,999,412 shares. The initial projection was pre-IPO, and now that we’re in post-IPO, falling Facebook stock lowered the final price of the deal.

Still, we can’t imagine that Instagram’s founders, staff, and investors are wailing over Facebook’s final offering of $715 million. The hit mostly affects the investors who threw $50 million at Instagram: They simply won’t be seeing their investment double like they may have hoped.

Dusten Carlson
Dusten has written for web and print and currently spends his time working on his upcoming graphic novel. He is also almost 30 and still has all of his hair.

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