Facebook Snags WhatsApp and Tesla Jumps After Hours

The Dow gave up nearly 100 points after the Fed's minutes came out, while investors digested news of Facebook's $19-billion acquisition of WhatsApp. Tesla shares also accelerated on earnings once again.

Feb 19, 2014 at 10:00PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Stocks traded even most of the day, but dipped late after the Federal Open Market Committee's minutes from its last meeting were released. As a result, the Dow Jones Industrial Average (DJINDICES:^DJI) finished down 90 points or 0.6%, while the S&P 500 dropped 0.7%. Investors, apparently, weren't happy with the Fed's plans to continuing tapering its monthly bond-buying program, barring any significant changes in the economy. According to the notes: "Several participants argued that, in the absence of appreciable change in economic outlook, there should be a clear presumption in favor of continuing to reduce the pace of purchases by a total of $10 billion at each FOMC meeting." Elsewhere, housing starts and building-permit numbers both disappointed the market, coming in at 888,000 and 937,000, but investors seem to attribute the drop to poor weather. Inflation indicators, meanwhile, showed only modest price increases in January. 

Facebook (NASDAQ:FB) was making waves after hours after it scooped up messaging service WhatsApp for the whopping sum of $19 billion. Facebook shares were down 2.7% on the news as investors may think that the social-network giant overpaid for the messaging app. The industry leader will pay $4 billion in cash, $12 billion in stock, and $3 billion in restricted shares that will vest over the four years for a service that counts over 450 million members, 70% of which use it everyday, and whose messaging volume is approaching the entire global SMS telecom volume. WhatsApp is also adding 1 million members every day. Facebook will leave the WhatsApp brand in tact and it will continue to operate it as a stand-alone application, and WhatsApp co-Founder Jan Koum will join Facebook's Board of Directors. The purchase is certainly a bold one for Facebook, but the company understands that its namesake site alone is not enough to dominate the future of social media. Just as it did with Instagram, the company is making a smart move but seizing another industry growth star. Observers can argue about the price tag, but this is the right strategy for Facebook.

In earnings news, Tesla Motors (NASDAQ:TSLA) soared past estimates in its earnings report once again as shares jumped 13% after hours. The electric-car maker posted a per-share profit of $0.33, ahead of estimates at $0.21, while revenue skyrocketed 148.5% to $761.3 million, much better than the consensus at $673.1 million. Even better, the company lifted its 2014 guidance, saying it expects to sell 35,000 Model S Sedans this year, ahead of previous projections at 29,000, which would give it a 55% increase over last year's total.  The company also plans to step up its production from 600 to 1,000 cars a week. Tesla shares have a sky-high price tag at a forward P/E of 121 and a market cap near half of General Motors, but shares should keep moving higher as long as the company continues to beat estimates and lift its guidance.

Looking for the next Facebook or Tesla?
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.


Jeremy Bowman owns shares of General Motors. The Motley Fool recommends Facebook, General Motors, and Tesla Motors and owns shares of Facebook and Tesla Motors. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers