"Our ability to acquire and integrate larger or more
  complex companies, products, or technologies in a
  successful manner is unproven"

That's very candid.

SEC filings tend, amusingly, to be very down on the company filing them. They're filled with lists of risks, to better fend off the inevitable shareholder lawsuits. But of course because "everybody knows" the SEC paperwork is fudged downwards, it gets treated just like marketing material (which everyone knows is fudged upwards) and ignored.

I am just trying to understand how this works, where did the 23M shares come from? Did they have to allocate a new share, from reserved share or from some where else?

That puts a share of Facebook around $30 if you buy that those 23M are worth 700M.

FTA: Facebook "paid 23 million shares at $30.89 a share plus $300 million cash for Instagram for a total of $1,010,470,000."

The math on the valuation of the shares is a little more complicated than 1000mm - 300mm / 24mm.

The rumor that I heard (need to substantiate somewhere) is that the options were priced at a Facebook valuation of around ~75bn. It's impossible to accurately price these options without knowing the total # of Facebook shares issued so far.

Shares come in different classes with different valuations in any case, there's no single number. Presumably zwigby is talking about the eventual market price of a post-IPO public share. But of course there's no requirement that these be issued 1:1 with the existing shares.

a Lot of changes should be happening soon with Instagram.