BlackBerry Ltd. rose as much as 8 percent in German trading after Facebook Inc. agreed to buy mobile-messaging startup WhatsApp Inc. for as much as $19 billion, highlighting the value of BlackBerry's rival service.
Facebook said yesterday it's paying $12 billion in stock, $4 billion in cash and $3 billion in restricted shares for WhatsApp, which lets users send messages through its services on mobile devices based on different operating systems. BlackBerry, which offers the BlackBerry Messenger instant-messaging service pre-installed on its phones or as a free download for iPhone and Android smartphones, reached as high as $9.82 in late trading yesterday after closing at $9.01 in New York.
In German trading today, the stock rose to the equivalent of $9.66 at 12:27 p.m. in Frankfurt, after reaching as high as $9.74.
The Facebook deal for WhatsApp, with more than 450 million monthly users, implies a valuation of about $3.4 billion for BlackBerry's BBM service, which has 80 million monthly users. BlackBerry Chief Executive Officer John Chen, named to run the company in November after a scrapped sale attempt, has singled out BBM as a pillar for growth to help revive the struggling smartphone maker. BlackBerry has a market value of $4.7 billion.
"Facebook's rich valuation per user for WhatsApp confirms that instant-messaging apps lead the next Internet gold rush," said Praveen Menon, an Internet analyst with Bloomberg Industries. "The steep valuation could be a positive signal for rival messaging apps such as WeChat, Line and Kakao, as well as BlackBerry's BBM service."
WhatsApp, which is popular in Europe, is adding 1 million users daily, and Facebook CEO Mark Zuckerberg said on a conference call yesterday that he expects the service to reach more than 1 billion people worldwide in the next few years.
Unlike traditional text messages, which consumers pay for through their mobile-phone plans, WhatsApp is free for the first year, and then costs 99 cents a year after that. Waterloo, Ontario-based BlackBerry made the BBM software available for free last year.
Lisette Kwong, a spokeswoman for BlackBerry, didn't have an immediate comment.