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...

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    - Dec 18, 2012 3:57 PM ET
  • As Facebook loses value, so does Instagram

    Staring way up at $1 billion.

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    I have heard that line, or some variation thereof, from venture capitalists more than a dozen times since Facebook (FB) agreed to acquire the mobile-sharing site back in April for "$1 billion." It's supposed to mean that overpaying can sometimes pay off, and that big returns aren't always predicated on helping to build large, sustainable businesses.

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    - May 30, 2012 4:48 PM ET
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    Whiny bankers snipe at Facebook.

    Facebook is getting some grief today for choosing to buy Instagram before going public, rather than waiting to make the $1 billion purchase until after its IPO.

    From the New York Post:

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    - Apr 11, 2012 1:10 PM ET
  • Why Instagram is worth $1B to Facebook

    By Don Dodge, contributor

    Facebook yesterday announced that it will pay $1 billion to acquire Instagram -- a company that is less than two years old, has no revenue and about a dozen employees. Remember, acquisitions are about what the acquirer can do with the company in the future, not some multiple of revenues or profits today. So why is Instagram worth $1 billion?

    Facebook acquired Instagram for about $30 per user, or $1 billion. ($30/user X MORE

    Apr 10, 2012 9:56 AM ET
  • Did Facebook panic?

    Why Facebook is buying Instagram.

    Last week, mobile photo-sharing site Instagram raised $50 million from venture capitalists at a $500 million valuation. Today, the company agreed to be acquired for $1 billion by Facebook.

    So what happened in the intervening days?

    For starters, the venture capital round had been in the works for more than a month. In fact, the Wall Street Journal reported the deal back on March 9. But when the MORE

    - Apr 9, 2012 3:03 PM ET
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