A Big Day for Tech Acquisitions and IPOs (Thanks, Facebook and Candy Crush)
1. Facebook drops $2 billion on virtual-reality company
Another tech company bites the dust, as Facebook announced Tuesday that it's buying virtual-reality goggle maker Oculus for a very real $2 billion. The acquisition hits a nice sweet spot between Instragram's $1 billion price tag and WhatsApp's $19 billion. Facebook now has a direct competitor to Google's Glass product -- plus, it's the first hardware maker Mark Zuckerberg has ever bought.
Oculus' past fundraising rounds generated $2.5 million on crowd-sourcing site Kickstarter in 2012 and $91 million from a venture capital company back in December. How do you think Oculus responded when offered $2 billion from Zuckerberg? We're still waiting on the champagne Snapchats from the team, but word is it was an enthusiastic "yes."
Venture capital firm Andreessen Horowitz, which has also invested billions in Bitcoin, celebrated the payoff on its big investment with a blog post. How will Facebook use these goggles (which look a lot like a lunchbox that you strap to your face)? Only Zuckerberg knows -- he's dropping $400 million in cash and the rest in new FB shares. Now investors are growing concerned about the free-spending Zuck, as the stock fell in after-hours trading following the press release.
2. Candy Crush's King Digital worth $7 billion for IPO
How much is going public worth? About $500 million for King Digital Entertainment, the maker of the colorfully addictive smartphone game Candy Crush that you first tried when you bored of Angry Birds. Pricing is completed, and the shares will trade on the New York Stock Exchange on Wednesday for the first time ever. Plus, King Digital snagged a pretty impressive ticker symbol: KING.
JPMorgan Chase, Credit Suisse, and Bank of America found investors to buy $500 million worth of the stock. Two of the original investors in King sold about 3.5% of the company each to these initial investors, meaning that the total value of the company (the market capitalization) is $7.1 billion. For all you math whizzes out there, that's the total number of shares times the $22.50 opening IPO price.It's a puzzle game with colored candies that people waste time on during their subway commute, and it's brought the owners $7 billion of wealth. How could this be, you ask? Well, 97 million daily users are buying extra lives and special features in the game for $1 apiece. A lot of extra lives adds up to more than $2.5 billion of revenues expected this year.
3. S&P Case-Shiller Index shows seasonally adjusted improvement
In case econ data didn't already confuse you, the legendary S&P Case-Shiller Home Price Index for January showed that home prices both rose and fell, depending on how you were looking at the numbers. The report tracks housing price info in 20 major metropolitan areas across the country, and those were the results.
That's right: According to non-seasonally adjusted numbers, home prices nationwide dipped 1% from December. However, if you seasonally adjust the numbers (which the report does do), then home prices rose by 0.8% nationwide. Kind of blows your mind.
The takeaway is that despite the mix of confusing headlines you're seeing today (just stick with MarketSnacks), economists suggest you look at the year-over-year, instead of month-over-month, info to get a good understanding of the data. With low interest rates throughout 2013, U.S. home prices are, in fact, up more than 13% since last January.
- Fed President James Bullard speaks
- Durable Goods Orders
MarketSnacks Fact of the Day: ESPN is the most valuable TV channel in the U.S. and accounts for 40% of parent company Disney's operating income.
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The article A Big Day for Tech Acquisitions and IPOs (Thanks, Facebook and Candy Crush) originally appeared on Fool.com.Jack Kramer and Nick Martell have no position in any stocks mentioned. The Motley Fool recommends Bank of America, Facebook, and Google and owns shares of Bank of America, Facebook, Google, and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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