The Final Price For Instagram Was $715 Million

Posted Oct 26, 2012

Facebook recently released their 10-Q with the SEC where they have revealed the final purchase price of Instagram.  It turns out Instagram will be in their accounting books at $521 million.  This is based on $300 million in cash that Facebook promised and 12 million vested shares of Class B common stock.  The Class B common stock was given to “non-employee stockholders.”

Facebook issued 11 million un-vested shares to Instagram employees including the founders.  After these shares vest in a three year period, they will have an aggregate fair value of $194 million, bringing the total to $715 million for Instagram.  The reason why the total price did not add up to $1 billion is because Facebook’s stock price dropped significantly since the time that the deal happened.

If the agreement to acquire Instagram fell through, Facebook would have to pay a $200 million charge.