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This deal absolutely stinks. It sure seems like someone said, "Hey Facebook, you just got paid. Why don't you buy instagram for an amount of money that we made
by hooande 15y ago
This deal absolutely stinks. It sure seems like someone said, "Hey Facebook, you just got paid. Why don't you buy instagram for an amount of money that we made up so that my buddies and I can get even richer?" And they made 78 million dollars behind that.
1. If people can make up money, then it lowers the value of money for everyone.
2. If people can make up money, then it destroys any semblance of fairness in the system. Why are we working every day when some people can just invent tens of millions of dollars for themselves?
This isn't how markets are supposed to work. An asset isn't worth one billion dollars just because someone you know has a billion dollars to spend. The last thing I expected to see was a blog post bragging about it.
- ericflo 15y ago> An asset isn't worth one billion dollars just because someone you know has a billion dollars to spend. Actually that's nearly the definition of what something is worth: how much someone is willing to pay for it.
- orky56 15y agoAs my finance professor says, "Price is what you pay; value is what you get."
- wpietri 15y agoI have no inside knowledge, but I doubt it. Look at the funding (left side, half way down the page): http://www.crunchbase.com/company/instagram http://www.crunchbase.com/company/instagram There are quite a number of people involved. The seed round people apparently had about 15% of the company. If I had to guess, the A and B round had 20-35%. The non-founder employees, could have another 10% or so. Leaving 40-55% for the founders. If you're trying to funnel money to somebody in specific, this is terribly inefficient; 80% of the money would go to other people. Also, Facebook is about to IPO, and this is a very high-profile deal. It's the worst time and the worst way to do something fishy.