How Facebook's tanking stock is hurting Instagram

Instagram hit the jackpot when it was bought by the social network for $1 billion — but the startup's value is dwindling as Facebook's stock slides

Instagram
(Image credit: CC BY:ilamont.com)

Facebook caught the tech world off guard in April when it bought the photo-sharing app Instagram for $1 billion — a surprising sum for "a smart set of photo filters and the tools to share them," says Alex Klein at The Daily Beast. But that was back in the good old days when investors were breathlessly hyping Facebook's IPO and prepared to cut the social network a little slack. Since the failed IPO, Facebook's share price has been cut in half, and no one may regret the buyout more than Instagram, whose value has plunged alongside Facebook's. Here, a guide:

How does Facebook's share price affect Instagram?

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up