Ecommerce

Souq.com which was acquired by Amazon for $580 million would’ve been worth $675 million today if it was an all-stock deal

There were a lot of rumors to how much Amazon acquired Souq.com for but Amazon’s quarterly filings for 2017 Q1 confirmed the price. The quarterly filing report which was first spotted by MENAbytes confirmed that Amazon had acquired Souq.com for $580 million in an all-cash deal.

But Amazon’s increasing stock prices which touched $1000 during trading earlier today and surging market cap makes one wonder how much Souq.com would’ve been worth if it was an all-stock deal. So here it is.

Amazon’s Share Price on the day it had acquired Souq.com (Mar 28) – $856
Amazon’s Share Price at closing today (May 30) – $996.70
Total increase in value since acquiring Souq.com – 16.44%

So if Souq-Amazon was an all-stock deal, it would’ve been worth 16.44% more than the agreed price (as of today) which would make it valued at $677 million. But Amazon’s surging stock price and market cap makes it obvious that no matter what they acquire, they would go for all-cash deals. The last time Amazon had an all-stock acquisition was in 2009 when they had acquired Zappos for $928 million but by the time the deal closed which took few months, Amazon ended up paying $1.2 billion-worth of stock. Since the Zappos acquisition, Amazon has acquired more than 35 other companies including Souq.com but none of these companies was lucky enough to get an all-stock deal.

Amazon is expected to close Souq.com’s deal later this year so it could’ve been worth even more as Amazon’s surging stock prices don’t seem like they would stop anytime soon. Founded in 1994, Amazon went public 3 years later and was valued at $461 million. Today its valued at $476 billion and now it is being argued that its going to be the first company to reach $1 trillion market cap.

Zubair Naeem Paracha

Founder at MENAbytes
A tech and startup enthusiast based in Riyadh. Zubair apart from leading MENAbytes is also building Qraar, a career discovery and development platform for millennials in MENA. He can be reached on Linkedin, Twitter or zubair [at] menabytes [dot] com.

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