Facebook announced on Wednesday afternoon that it had reached an agreement to buy popular mobile messaging startup WhatsApp for an upfront total of $16 billion, including $4 billion in cash and about $12 billion in Facebook shares.

WhatsApp co-founder and CEO Jan Koum will join Facebook’s Board of Directors, but WhatsApp will continue to operate independently within Facebook, much like Instagram. The purchase price could rise to as much as $19 billion once you factor in an additional $3 billion in restricted stock units that will be granted to WhatsApp’s founders and employees vesting over four years.

The purchase price is insanely high for a startup with only 55 employees. The $19 billion valuation means Facebook believes WhatsApp is worth over $42 per user. Major companies that have market caps under $19 billion include: United Continental, American Airlines, Ralph Lauren, Marriot International, Campbell Soup, Coach, and Tyson Foods.

The acquisition also shoots Koum and his fellow WhatsApp co-founder Brian Acton into the billionaire ranks. FORBES estimates that Koum held about a 45% stake in the company, while Acton’s stake was over 20%.

In event the merger fails to obtain regulatory approval, Facebook has agreed to pay a breakup fee to WhatsApp of $1 billion in cash and issue to WhatsApp shares of Facebook Class A common stock equal to another $1 billion.

“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,” Facebook CEO Mark Zuckerberg said in a statement. “I’ve known Jan for a long time and I’m excited to partner with him and his team to make the world more open and connected.”

“WhatsApp’s extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide. We’re excited and honored to partner with Mark and Facebook as we continue to bring our product to more people around the world,” Koum said.

WhatsApp has over 450 million monthly users, 70% of whom are active on a given day. They are adding more than 1 million new registered users per day.

only 55 employees. christ..

Ugh.. better find a new messenger.. before facebook uses it to spam me with ads..

Wow that's a lot of money! Who knew Whatsapp was worth almost as much as Sony...

Was it worth it though? There are other alternatives to whatsapp. 

ok, time to uninstall

I was using it, good messenger. But 19 billion? Hot damn, Zuckerberg knows how to party but yeah, I could see how this may benefit Facebook in the long run, not to mention all the valuable info in the messages...

I hope they will not connect it with each other -.-

is this for real?

Wow, that makes the $3 Billion they were offering to Snapchat look like nothing

That makes Whatsapp more valuable then either Sony or Nintendo....