Wall Street sees sense in Facebook's $19 bn WhatsApp buy, experts bullish on shares

Feb 22 2014, 10:14 IST
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Facebook shares: At least two brokerages downgraded their recommendations after SocNet acquired WhatsApp. Reuters Facebook shares: At least two brokerages downgraded their recommendations after SocNet acquired WhatsApp. Reuters
SummaryFacebook shares were down before bell, but majority of analysts remain positive.

of the platform to incorporate new functionality such as payments, app distribution, social features ...," Macquarie Equities Research analyst Ben Schachter said.

Some analysts, however, said Facebook was paying the high price to keep WhatsApp from being snapped up by a rival.

"Facebook shares would have been pressured by more than single-digit percentages in after-market trading if Google Inc had purchased WhatsApp instead," Stifel analyst Jordan Rohan said in a note.

Pivotal Research's Brian Wieser, who downgraded his rating on Facebook shares to "hold" from "buy," said he expects Facebook shares to face pressure in the near-term as investors come to terms with the risk of future acquisitions.

Facebook shares were trading at $65.95 in premarket trading.

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