Facebook falls after WhatsApp deal; Apple slips Mixed views follow $19 billion acquisition of mobile-messaging startup

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Facebook shares slip following social network’s $19 billion acquisition of WhatsApp.

SAN FRANCISCO (MarketWatch) — Facebook Inc. shares fell Thursday as investors and analysts weighed in on the social-networking giant’s $19 billion acquisition of mobile-messaging company WhatsApp.

Facebook FB -2.15%  was off by 2.6%, to trade at $66.31 in the wake of the deal announced late Wednesday. The deal includes $12 billion in Facebook stock, $4 billion in cash and $3 billion in restricted stock. Facebook intends to use WhatsApp to strengthen its position in the market for messaging on smartphones and other mobile devices.

WhatsApp has seen its popularity explode since it was founded five years ago, and the company claims to have 450 million active users and is adding another 1 million every day.

See commentary: What’s up with Facebook’s $16 billion WhatsApp deal

Analysts were mixed regarding their sentiment about the acquisition. Ken Sena, of Evercore Partners, cut his rating on Facebook to equal weight from overweight and lowered his price target on the company’s stock to $60 a share from $70. In a research note, Sena said he was concerned that the “cost of delivering engagement through acquisition seems excessive,” as Facebook paid $42 for each WhatsApp user, while the company currently generates just 99 cents for every user.

However, Arvind Bhatia, of Sterne Agee, called the acquisition “strategically sound” and that “the potential size of the user base and strong engagement on WhatsApp should ultimately lead to meaningful monetization.”

Apple Inc. AAPL -1.16%  also dipped into the red, down by $2.42 at $534.95 a share. Analyst Ben Reitzes of Barclays cut his rating on Apple to equal weight from overweight, saying that he isn’t convinced that new products like a smartwatch or a TV, “could move the needle like new categories did in the old days.” As a result, Reitzes said he expects Apple’s shares to remain close to their current trading range for the next year.

Hewlett-Packard Co. HPQ +0.66%  slipped by 11 cents a share to $29.32 in advance of the tech giant’s fiscal first-quarter earnings report, due after the close of trading. H-P is expected to report a decline in sales as it deals with sluggish business in the corporate IT market.