Reference no: EM132522567

"On February 20, 2014, Mark Zuckerberg (Zuckerberg), Founder and CEO of Facebook Inc (FB) acquired WhatsApp Inc (WA), a mobile application developer, for $19 billion. The price was paid in the form of stock $12 billion, cash $4 billion, and restricted stock $3 billion . Following this acquisition, there were mixed reactions in the market. Some believed that the acquisition was in line with FB's strategy, while some felt it was a directionless acquisition. But Zuckerberg was confident that it was the right decision. "No one in the history of the world has ever done something like this," he said. He believed that the increasing user base of the WhatsApp mobile messenger (WhatsApp) across the world could be an added advantage for the development of FB's business prospects." M&A activity have risks associated with them (Furfine and Rosen, 2011). They may create or destroy value depending on how they perform (Ferrer, 2012).

Question 1: Critically assess the above case study to evaluate to what extent Zuckerberg was right in his decision through the use of empirical evidence and literature.