Could and Would Facebook Inc (FB) Acquire SnapChat – What would it cost?


There have been rumors swirling over the year about potential acquisitions involving growing social video messaging app, Snapchat. The company, which currently is valued at approximately $16 million based on investment rounds that they have raised, reported turned down an offer from Facebook Inc (NASDAQ:FB) for $3 billion a while back.

Snapchat is more than just about Snapchat though, as the company also has their “Stories” app, which in and of itself is a huge hit. Snapchat generates revenue by mixing in video ads within their vanishing social video model. Advertisers purchase video time in the “Discover” section of the app. Their business model is much different than that of Facebook Inc (NASDAQ:FB), but it certainly would fit in quite nicely with their platform. The biggest asset to Facebook would be the 100 million plus users and the 7 billion videos per day that run through the app.

Facebook Inc (NASDAQ:FB) certainly has the assets needed in order to acquire the company, but are they really willing to spend what it would take to do so? As of now, probably not, but if they see their stock price increases in the coming year, giving them more assets to work with, anything is possible. Would it take $16 billion for a deal to be complete? More than likely it would not, but then again only the founders of Snapchat would know that answer.

The stock is up 1.34% or $1.31 following the news, hitting $98.82 per share. About 21.56M shares traded hands. FB has risen 20.88% since June 8, 2015 and is uptrending. It has outperformed the S&P500 by 28.36%.

From a total of 33 analysts covering Facebook (NASDAQ:FB) stock, 32 rate it a “Buy”, 1 a “Sell”, and 0 a “Hold”. This means that 97% of the ratings are positive. The highest target price is $155.0 while the lowest target price is $88. The mean of all analyst targets is $122.65 which is 24.11% above today’s ($98.82) stock price. Facebook was the topic of 58 analyst reports since July 21, 2015 according to the firm StockzIntelligence Inc. Argus Research maintained shares on November 6 with a “Buy” rating. Morgan Stanley maintained shares with a”Overweight” rating and a $120 target share price in their report from a November 5. Canaccord Genuity maintained FB stock in a recent report from November 5 with a “Buy” rating. Credit Suisse maintained the rating on November 5. Credit Suisse has a “Outperform” rating and a $135 price target on shares. Finally, Jefferies maintained the stock with a “Buy” rating in a report they issued on a November 5.

The institutional sentiment increased to 1.73 in Q2 2015. It’s up 0.01, from 1.72 in 2015Q2. The ratio improved, as 69 funds sold all their Facebook Inc shares they owned while 375 reduced their positions. 126 funds bought stakes while 643 increased their total positions. Institutions now own 1.55 billion shares which is 2.48% more than the previous share count of 1.51 billion in 2015Q2.

Millennium Tvp Management Co. Llc holds 52.76% of its total portfolio in Facebook Inc, equating to 639,552 shares. Parametric Risk Advisors Llc owns 7.97 million shares representing 46.51% of their total US portfolio. Moreover, Sc Us (Ttgp) Ltd. has 41.15% of their total portfolio invested in the company, equating to 1.04 million shares. The California-based Meritech Capital Associates Iii L.L.C. has a total of 37.81% of their portfolio invested in the stock. Duquesne Family Office Llc, a New York-based fund reported 4.09 million shares owned.

Since February 25, 2015, the stock had 0 buys, and 45 selling transactions for a total of $189.62 million in net activity. Athwal Jas sold 30,000 shares worth $3.06M. Stretch Colin sold 1,000 shares worth $98,710. Cox Christopher K sold 5,778 shares worth $561,622. Schroepfer Michael Todd sold 31,283 shares worth $3.00M. The insider Fischer David B. sold 15,000 shares worth $1.43M.

Facebook, Inc. is a social networking company. The company has a market cap of $275.70 billion. The Firm is engaged in developing products that enables users to connect and share through mobile devices and personal computers. It has 99.27 P/E ratio. It offers various services focused on people, marketers and developers.