Term Sheet

The latest on private equity, M&A, deals and movements — from Wall Street to Silicon Valley

Instagram + video = Less than Instagram

June 20, 2013: 4:16 PM ET

photoInstagram video fails to excite Facebook investors.

FORTUNE -- Facebook today rolled out its Instagram video product, 14 months after first acquiring the mobile photo-sharing app.

Investors reacted kind of like you'd expect them to act when you hype a "mystery" product launch that: (a) Leaks early, and (b) Is basically a knock-off of what Twitter was already doing with Vine.

Facebook (FB) shares finished the day down 1.64%, to close at $23.91 per share.

That means Facebook lost $968 million in market cap today. Obviously we can't attribute all of that to the Instagram video launch -- the broader markets took a tumble too -- and Facebook obviously believes there is long-term value here.

But if you play out the simple top-line, Facebook lost around 26% more value today than it spent on Instagram in the first place.

Or, put another way, Facebook spent money to lose money. At least for now...

Sign up for Dan's daily email newsletter on deals and deal-makers: GetTermSheet.com

Posted in: ,
Join the Conversation
About This Author
Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

Email a Tip | @danprimack | RSS
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.