Facebook CEO Mark Zuckerberg may be worth more than $50 billion, but he’s not immune from understating what he paid for things. Even if those things are billion-dollar assets of their own.
At a federal courthouse in Dallas on Tuesday, Zuckerberg took the stand to testify in an intellectual property lawsuit between Facebook-owned virtual reality company Oculus and ZeniMax Media, a company that previously employed several Oculus employees, including co-founder Palmer Luckey, and alleges they created Oculus’ Rift VR headset from misappropriated trade secrets.
Facebook had previously announced that it acquired Oculus for “approximately $2 billion” in a March 2014 release, but when asked directly about the price paid by a ZeniMax attorney, Zuckerberg acknowledged the total consideration was about 50 percent higher.
New York Times reporter Mike Isaac, who was at the courthouse, tweeted Zuckerberg’s response:
Zuck on Oculus deal: "we bought the company for about 2b, had additional 700mm in retention for key folks, 300 mm earnout for milestones"
— ಠ_ಠ (@MikeIsaac) January 17, 2017
That $2 billion purchase price, plus $700 million paid to keep key employees and a $300 million earnout for milestones really adds up to $3 billion.
Fortunately, with $26.1 billion in cash and short-term investments on its balance sheet as of Sept. 30, Facebook can afford to pay a little premium. And with the rapid growth of virtual reality since then — this year’s Consumer Electronics Show in Las Vegas had a massive VR presence — Zuckerberg may not have overpaid at all.