3. At the time of its acquisition of Instagram, Facebook was still a privately held company....

3. At the time of its acquisition of Instagram, Facebook was still a privately held company. Had it been a publically held organization, do you think Facebook would have paid the $1 billion asking price for Instagram?

Expert Solution

Yes, I think that even if Facebook would have been publicly listed then also it would have paid the asking price similar to that it had paid when it was private.

Acquisition of instagram was one of the best thing happened in the history of the Facebook because it was able to acquire a large amount of share base and it could expand its reach to a large amount of public and it just not helped it in growing through instagram but it also helped in creating a lot of synergy which will help in growth and expansion in the long run and it can be reflected through the share price of the Facebook.

I think that even if Facebook would have been up publicly listed company then also it would have paid similar asking price and I think that it would have been more than the asking price . This was because Instagram was also a profit making company and there was a lot of customer base and similar amount of exposure to various public so I think it was added to the core competitiveness of the Facebook and it was also adding to acquisition of a large market share along with the large possibility of addition of New Market so I think Facebook would have maintain the similar building prices even if it was a listed company.

It can be summarised that Instagram and Facebook are almost operating in the similar industry and acquisition of instagram will be meaning that Facebook will be increasing the core competitiveness and it will also be increasing it's control over the market and it can be the leader of the market for a longer period of time by acquiring all those who are trying to snatch away the shares of the company so this company has gone for the acquisition of all those companies which has right to acquire the share of the market of the Facebook and they have been aggressive in their strategies and I think even if it was publicly listed company it would have exercised with the similar bidding price.

jeff jeffy answered 2 years ago

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