The Phaserl


WhatsApp With That?

…In just about every way imaginable, America has borrowed beyond its ability to repay. Meanwhile our foreign creditors continue to provide vendor financing so that we can buy what we can’t really afford.”

by Peter Schiff, EuroPacific Capital:

Two pieces of business news announced this week provide a convenient frame through which to view our dysfunctional and distorted economy. The first (which has attracted tremendous attention), is Facebook’s blockbuster $19 billion acquisition of instant messaging provider WhatsApp. The second (which few have noticed) is the horrific earnings report issued by Texas-based retail chain Conn’s. While these two developments don’t seem to have much in common, together they shed some very unflattering light on where we stand economically.

Given the size and extravagance of the Facebook deal, it may go down as one of those transactions that define an era (think AOL and Time Warner). Facebook paid $19 billion for a company with just 55 employees, little name recognition, negligible revenues, and little prospects to earn much in the future. For the same money the company could have bought American Airlines and Dunkin’ Donuts, and still have had $2 billion left over for R&D. Alternatively they could have used the money to lock in more than $1 billion in annual revenue through an acquisition of any one of the numerous large cap oil producing partnerships. Instead they chose a company that is in the business of giving away a valuable service for free. Come again?

Peter Schiff continues @

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2 comments to WhatsApp With That?

  • AC

    I believe that ‘Ap must be an abbreviation. They omit the Cr- prefix.

  • patriot

    as soon as I heard of this INSANE deal facebook made I thought to myself,I think we just saw the top of the tech and stock market.This reminded me of sitting in my friends drive way in Florida in 2006 as he bragged how much he had made on his home going up in value,and me saying you know these homes aren’t worth anything close to what there price is don’t you.Or when I was in Daytona for the 500 in 2001,and met up with some guys from New York in there early 20’s.They were money makers and were bragging about how much they loved EMC and JD Uniphase.If you look and listen to everyday people and truthful news,it’s not hard to see whats going on and to see where it’s leading.

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