Selling the company for a low price of $53 million, Meta acquired Giphy for over $315 million in 2020, therefore making this a loss of $262 million
Meta, the parent company to Facebook and Instagram has just announced that it is now selling its GIF company ‘Giphy’ to Shutterstock for a relatively low price of only $53 million, a deal that will set back Meta by $262 million since it had recently acquired Giphy for $315 million in 2020.
So why is Meta selling Giphy at such a low price? Well, this decision comes as a result of increased regulatory pressure from UK authorities, mainly by the Competition and Markets Authority (CMA), which is an authority responsible for reducing anti-competitiveness practices in the market.
Adding onto this increased pressure by authorities is the lowered public interest in GIF’s, which have seen a major drop ever since Facebook acquired Giphy back in 2020.
“User sentiment towards GIFs on social media shows that they have fallen out of fashion as a content form, with younger users in particular describing GIFs as ‘for boomers’ and cringe,” said the company in a recent statement.
When buying Giphy for $315 million in 2020, Meta considered it to be a good deal, however now as public interest lowers, it was struggling to find a buyer that would even be willing to pay half of what the company was worth three years ago.
Well, despite all of the bad news, the company has gone into good hands since Shutterstock works remotely around the same industry therefore the future can be good for Giphy.
Shutterstock made an official announcement for its most recent acquisition which has taken place after a seven month process in which Meta agreed Competition and Markets Authority (CMA) ruling for the divestment of Giphy.
According to details, the Giphy deal will be finalized in June after the fulfillment of customary closing conditions.
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