Facebook Inc (NASDAQ:FB) and Tesla Motors Inc (NASDAQ:TSLA) are the stocks to watch today, as Facebook announced a key acquisition last night and Tesla released its fourth quarter earnings. Shares of Facebook declined 3% in premarket trading, while shares of Tesla rose nearly 13%.
Facebook to buy WhatsApp
Facebook Inc (NASDAQ:FB) announced last night that it had entered into an agreement to acquire the popular messaging app WhatsApp. The deal is worth $16 billion. At the close of the deal, all the outstanding shares of WhatsApp capital stock and options to purchase stock will be canceled.
Both companies expect the merger to close later this year. WhatsApp co-founder and CEO Jan Koum will become a member of Facebook Inc (NASDAQ:FB)’s board of directors. Facebook has also agreed to file a registration statement regarding the resale of its Class A common stock to be issued to WhatsApp stockholders.
If the merger has not closed by August 19, 2014—or August 19, 2015 if all conditions except some regulatory approvals are complete—either party will be able to terminate the merger. If the merger is terminated, Facebook Inc (NASDAQ:FB) will pay or cause to be paid $1 billion in cash to WhatsApp and issue $1 bilion worth of its shares to WhatsApp.
Tesla Motors smashes earnings expectations
In spite of a couple of preannouncements regarding revenue and delivery beats, Wall Street was still exceedingly happy with Tesla Motors Inc (NASDAQ:TSLA)’s latest earnings report. The automaker’s stock currently looks poised to open at a record high opening price of around $218 a share after climbing as high as $223 in after-hours trading last night.
Tesla Motors Inc (NASDAQ:TSLA) reported 33 cents per share in non-GAAP earnings and 13 cents per share in GAAP losses. GAAP revenues were $615 million, and non-GAAP revenues were $761 million. Analysts had been expecting Tesla to report earnings of 21 cents per share and $683 million in revenue for the December quarter.
On last night’s earnings call, Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk provided an update on their planned gigafactory, saying they expect to get it done with a number of partners over the next three years. He said they didn’t have time to go into further details on plans for the massive battery factor but that the subject deserves its own conference call. The automaker is planning to do a call on the subject next week to answer questions about it.