IT’S OFFICIAL! Facebook and Instagram FINALLY Get the Go-Ahead

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Facebook (NASDAQ:FB) has received all official clearance to start issuing stock for its Instagram acquisition. A California Department of Corporations fairness hearing, clearing which lets Facebook bypass the costly and time-consuming federal registration process, concluded without any hiccups for the social network. Last week, the U.S. Federal Trade Commission had issued a statement saying it had also concluded its investigation in the matter.

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Facebook agreed to acquire the photo-sharing app company for $300 million in cash and nearly 23 million Facebook shares in April. While the social network had not become a public company then, the estimated value of its stock was roughly $31 per share, giving the acquisition deal a value of $1 billion. However, with Facebook’s stock price having dropped to just over $19 a share, almost half of its IPO price of $38, the Instagram deal now comes to about $747 million.

The fairness hearing reportedly brought up this point, but concluded the deal had been “fair, just, and equitable.” Instagram chief executive Kevin Systrom testified as a witness, telling investigators that the “billion-dollar valuation headline was something generated from the press,” and that Instagram always only took into account the stock and cash offer. “I’ve been taught throughout my life to realize there’s upside and downside to all public markets,” Systrom said at the hearing, according to The Wall Street Journal. “We still believe firmly in the long-term value of Facebook.”

Systrom added that “whirlwind negotiations” with Facebook stated on the Easter weekend and that this was the only formal takeover offer received by his company. There had been rumors that Apple (NASDAQ:AAPL) and Twitter had also been interested in acquiring the app maker. He also told California state officials that Instagram did not generate any revenue at the moment, has operated on a loss, and was simply focused on building an audience.

Instagram launched as an iPhone app in 2010 and had grown to 80 million users by July this year. It introduced a Google (NASDAQ:GOOG) Android version of its app earlier this year.

Facebook’s head of corporate development, Amin Zoufonoun, said at the hearing that the social network intended to trade about 1 percent of its equity for Instagram.

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