Facebook Will Not Acquire Whatsapp: Tech Winners & Losers (Update 1)
NEW YORK (TheStreet) -- Facebook (FB) shares were slightly lower, off 0.11% to $27.97, on Monday as rumors surrounded the social networking company about a potential acquisition.
It was reported Facebook may acquire mobile messaging app Whatsapp as it looks to expand its revenue base and messaging offerings.
Perhaps one reason for Facebook to acquire Whatsapp is the potential to continue generating revenue from its mobile initiatives, as it looks to grow outside of the Web platform. In the third quarter, Facebook generated about $150 million in advertising revenue, significantly more than Wall Street was expecting.
Sterne Agee's Arvind Bhatia said he thinks there could be more coming for investors.
"We believe investors are beginning to appreciate mobile's larger reach, engagement and monetization opportunity. With the recent integration with iOS, FB has seen an 80% increase in iOS News Feed loads and a more than 20% increase in iOS engagement in terms of likes, etc," Bhatia wrote in a recent research report. He rates shares buy with a $32 price target.
Facebook declined to comment for this story.
Update: Whatsapp responded to the rumors, telling Financial Times reporter Tim Bradshaw "The Techcrunch article is a rumor and not factually accurate."
Dell (DELL) shares tacked on 5.46% to $10.17 after Goldman Sachs upgraded shares to buy.
Given the company's large cash balance ($14.2 billion at the end of the third quarter), Dell could be a leveraged buyout opportunity.
Goldman Sachs analyst Bill Shope raised his price target to $13 from $9 following the upgrade.
Qihoo 360 Technology (QIHU) shares added 9.25% to $27.30 on extremely heavy volume, as the Chinese Internet company may make gains in the Internet search industry in China.
The dominant player in Chinese Internet search is Baidu (BIDU) , but hopes are rising that Qihoo, which is based in Beijing, may begin making inroads into the profitable sector at the expense of Baidu.