4 ms·

WhatsApp got such a good deal because there was a bidding war between Facebook and Google. It had very little to do with their profitability.

• vikramkr 7y ago
  It's probably more accurate to say "desireable" instead of "profitable" here. The decision maker at the acquirer has to believe that there is some profit in it from them, but that doesn't necessarily have much to do with profitability of either side of the transaction, it could just mean a bigger bonus, or shutting out a competitor, or so on.
  • tptacek 7y ago
    Isn't evaluating prices in terms of "desirability" tautological?
    • mushufasa 7y ago
      It is.
    • vikramkr 7y ago
      Yes, and it breaks away from the mindset that there's any one thing that matters here and that it could really just be anything that any acquirer finds they like, not just profit.
  • nine_k 7y ago
    I don't think so. A profitable company can continue without being acquired. A merely "desirable" but unprofitable may not have this luxury for long enough for another acquisition deal to crop up.
    • vikramkr 7y ago
      We are discussing the moment of acquisition though in terms of who gets the best deal. A desireablencompany could also raise capital