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.