Facebook buys out Oculus (stock appropriately falls 7%)

[AliG]

http://money.cnn.com/2014/03/26/inve...d=HP_Highlight

Facebook has just agreed to buy our favorite virtual reality developer for $2 Billion. Can't say I blame the founders for taking the money, but I'm not happy about this (apparently neither are FB shareholders).

Let the ranting commence:

[SoF]

Bummer...specially because they have been supported by enough people to do it on their own.
Not talking about the early adopters who were "used" to now cash in...

[alpha0ne]

Maybe selling out was the only way to get the Oculus VR to market before Sony release their own version, or before apple steal the design/patent and launch 'the next big thing'............iReality

[Kallenator]

Isn't a fallen stock value "normal" after a company makes an acquisition of another of substantial value, it doesn't really mean that the shareholders are against the acquisition? Apparently the inverted situation of rising stock value after an acquisition is quite rare.

Even though most of us was shocked about the news, we should hold out and see how the situation unfolds. Regardless of our collective hate towards the "large evil Facebook" it might turn out ok.

Fingers crossed.

[mockingbird]

Sellouts. I hope everyone who backed it on Kickstarter learns their lesson not to jump on the collectivist bandwagon because it is the trendy thing to do. Ultimately, people do what is in their own interest regardless of how they were propped up with support. Ultimate sellouts.

[Dimitriman]

Simpsons did it!

[xVeinx]

This one leaves me in confusion...

[AliG]

Isn't a fallen stock value "normal" after a company makes an acquisition of another of substantial value, it doesn't really mean that the shareholders are against the acquisition? Apparently the inverted situation of rising stock value after an acquisition is quite rare.

Even though most of us was shocked about the news, we should hold out and see how the situation unfolds. Regardless of our collective hate towards the "large evil Facebook" it might turn out ok.

Fingers crossed.

Nope, usually a big buyout is positive news because it tells shareholders they are expanding in a direction that will provide more profits

[Tim]

For a second there I really thought it was already April 1st.

[Kallenator]

Nope, usually a big buyout is positive news because it tells shareholders they are expanding in a direction that will provide more profits

But why would the shareholders think that buying Oculus Rift will be unprofitable? I don't really see how this can be bad for Facebook, only bad for Oculus and we have yet to see how this pans out.

Or is Virtual Reality a sticky thing from the past that the general middle age stock holder has no faith in?

[Dimitriman]

Fyi, sometimes shareholders prefer dividends over huge investments, that is why stock goes down in situations like this, even if the acquisition is strategically good.

[Kallenator]

Fyi, sometimes shareholders prefer dividends over huge investments, that is why stock goes down in situations like this, even if the acquisition is strategically good.

And yet when Facebook acquired WhatsApp for: 4 billion USD cash, 12 billion in Facebook shares and 3 Billion in restricted stock. Their stock fell 3.4%, acquiring Oculus is but a fraction compared.
Yes I do realize that WhatsApp(400 million active users) and Oculus(>50k? Developers and users) are vastly different and therefor problematic to compare, WhatsApp will technically earn Facebook money from day 1 while Oculus probably needs a year before they can release consumer version 1. But at 1/10 of the purchase price the Oculus might pay for itself faster, I hope you see my point? =)

http://www.theguardian.com/business/...ition-reaction

[n00b 0f l337]

The entire idea of mentioning the stock dip is to denote that the public disagrees, and that is done to support the OP's post idea that it's a bad move.
It's normal for the stock to dip. It happens.

Now back to the meat and potato's.
If Facebook leaves it for the most part alone, then this is fine. More money and backing.

If they get stupid with Oculus... Well... Damnit.

[El Mano]

I'm glad I didn't support them. I would be throwing up right now.

A hardware peripheral with sensors, from a company that makes a living out of selling privacy.
Yes, you can expect the worse.

Fortunately, there are alternatives in development. Check this out:
http://www.businessinsider.com/oculu...natives-2014-3

That Infiniteye thing looks promising. Compared to this, the Rift is completely uninteresting.

[AliG]

But why would the shareholders think that buying Oculus Rift will be unprofitable? I don't really see how this can be bad for Facebook, only bad for Oculus and we have yet to see how this pans out.

Or is Virtual Reality a sticky thing from the past that the general middle age stock holder has no faith in?

Basically people think Facebook will ruin the product, which means not only a waste of $2billion on their behalf, but the public misses out on a highly anticipated product.

[AliG]

Fyi, sometimes shareholders prefer dividends over huge investments, that is why stock goes down in situations like this, even if the acquisition is strategically good.

That doesn't make any sense. If people thought the move would result in higher dividends, wallstreet would have been buying up the stock left and right. A 7% drop is enourmous for a big company, that means that a huge number of investors were selling based off the principle that it is worth less in the long run after the purchase. Never forget that a stock is a valuation of what the company is worth in the future, not what it is worth today.

[Greg83]

its due to this being the first PRODUCT actually gonna be invested in by facebook
something that creates their name.

if bell or GM made only video games IT , junk in 3-10 years. already not a product or a resource created. they'd be forgotten long ago too

the enemy to all investors. is actual creation of the product. what all investment is preventing , the production of the product and assembly line. for the profits off of artifical scarcity.

this is the replacement for tv

add second HDMI port, scrap the usb and all that eye toy crud and prop piratory software. and you have the new monitor for the workplace with dual screen seen at the same time over each other, over lapping
you have the 3d for all games right away
and you have 3d movies done right

costs of screens that size and at 4K resolution is possible now, remove licences and made in china you're talking about $15 for 4k screens
$5 for binoculars. defeating the digital stretching issues.
and then who cares about the rest of occulus.

bring us whole vison 4k res now for $50 in 5 years replacing tv. and leave all the eye toy to the minority on consoles replacing their tv's with teh rift in 2d

and that 2 bilion was all jsut to stop the developers wasting a lifetime for propiratory software and the next wii toy. that even nintendo had to break away from to get back their market.

and in the mean time, make those whom want this being more then the tv replacement, pay those 2 guys their 2 billion to give up salary times 50 years of resource waste on useless .

the end

[Olivon]

To summarize :

[Dimitriman]

That doesn't make any sense. If people thought the move would result in higher dividends, wallstreet would have been buying up the stock left and right. A 7% drop is enourmous for a big company, that means that a huge number of investors were selling based off the principle that it is worth less in the long run after the purchase. Never forget that a stock is a valuation of what the company is worth in the future, not what it is worth today.

More investments in the Short Run = Less dividends in the long run, its basic economics. Facebook will not recover its 6.5 Billion dollar investments it made this year in less than 12 months you know... for making these investments, they have to forego some dividends to its shareholders. Assets = liabilities + shareholder's equity, Oculus + Whatsapp increase assets, do the math.

[NEOAethyr]

I though the future was in augmented reality and not vr...

Simpsons did it!

Hello..., interesting.
Hmm that doesn't seem to be the only prediction that late night cartoons have done...

[crash5s]

Makes some sense. The real money in VR was never in gaming to start with. It was always VR colaborative business meetings, VR class rooms, VR conferencing, ect. The sooner the tech is moved out of gaming and into those areas the sooner someone see's a real payday.

[Dimitriman]

I though the future was in augmented reality and not vr...


Hello..., interesting.
Hmm that doesn't seem to be the only prediction that late night cartoons have done...

Actually I found out that the FarmVille part was photoshopped, its a "yard work simulator" but its close enough...

[n00b 0f l337]

http://www.muktware.com/2014/03/ocul...facebook/24557

Uh... anyone?

[Kallenator]

http://www.muktware.com/2014/03/ocul...facebook/24557

Uh... anyone?

Did you not read the whole article or are you holding for 1. of April? :p

This is satire. If you want to read more satire by Swapnil Bhartiya under ‘Damn-O-Crazy’ section, you can circle him and Damn-O-Crazy page on Google+, Twitter and Facebook. We also have an RSS Feed in case you are interested.

[N19h7m4r3]

I'm glad I didn't support them. I would be throwing up right now.

A hardware peripheral with sensors, from a company that makes a living out of selling privacy.
Yes, you can expect the worse.

I was a week away from actually buying into it and getting the new Dev kit 2 because it supports OSX and Linux.

Thanks for that link, time to look into alternatives.