Business Case Studies & Business Publications

Facebook’s Acquisition of WhatsApp: The ...

Haskins, Mark E.

Case

Facebook’s Acquisition of WhatsApp: The Rise of Intangibles (A)

Haskins, Mark E.

C-2382 | Published November 9, 2016 | 15 pages Case

Collection: Darden School of Business

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One of Susan Shaw’s interests is investing in the stock market. She has copied some pages of Facebook Inc.'s 2015, 2014, and 2013 financial statements, and the company sure seemed like an investment winner. But as she peruses these financial statements, she notices that in the 2014 financial statements there are some huge differences from the 2013 statement for a number of line items, such as Total Assets, Goodwill, Additional Paid in Capital, Revenue, Net Income, and Net Cash Used in Investing Activities. The reported dollar amounts for many of these items listed on the 2014 balance sheet, income statement, and statement of cash flows, had more than doubled and she wonders if traditional financial statements and reporting conventions were robust and effective in communicating the intricacies and details of deals such as Facebook's acquisition of WhatsApp and were all Facebook's assets and enterprise value reflected in its balance sheets.