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Billionaire Leon Cooperman: Facebook Inc (FB) Is a Value Play

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Facebook Inc (NASDAQ:FB)Billionaire Leon Cooperman appeared on CNBC last week to say that the social networking giant Facebook Inc (NASDAQ:FB) is a value play. He noted that the company’s valuation might appear rich with Facebook having “a higher multiple than the kind of things we’re normally involved in, but we think there’s a lot of wind to their back” (check out Cooperman’s high upside picks).

He proceeded to say, “We think that people are underestimating the mobility opportunity that exists in Facebook…we think ultimately they could achieve a market cap comparable to a Google Inc (NASDAQ:GOOG), which would make the stock very, very rewarding.”

Theoretically speaking, if Facebook Inc (NASDAQ:FB) did reach the same market cap as Google Inc (NASDAQ:GOOG), there would be 350% upside for the social network. The catalyst for such appreciation, according to Cooperman, is that Facebook’s increased performance from advertising and mobile isn’t reflected in the current stock price. He says, “we think that’s coming…the numbers are starting to ramp up.”

There’s no doubt that Facebook Inc (NASDAQ:FB) is considered the pioneer of the social networking market, having amassed a user base of over 1 billion individuals. There is also a large untapped future user base in emerging markets, including Southeast Asia, Latin America and Africa.

The other big revenue driver will be Facebook Inc (NASDAQ:FB)’s potential to capitalize on the increase in online advertising spending. GroupM suggests that global digital ad spending is expected to increase approximately 14% year- over-year in 2013, which will be 21% of all advertisement spending. Facebook’s ability to track personal data and details will only help its position in the advertising market, as this ability will help advertisers display relevant ads to target audiences.

Unfortunately, in the display ad market, Facebook Inc (NASDAQ:FB) lost its top spot to Google Inc (NASDAQ:GOOG) in 2012. eMarketer expects Google to lead the market for the next three years through 2015. Google is expected to be the fastest growing platform over the next few years, taking 21% of the market by 2014. By then, Facebook is expected to have 16% of the market. Google’s dominant position should be spurred by mobile display ads from Youtube and DoubleClick.

Google continues to dominate the search market, holding some 67% of U.S. market share according to ComScore. Google is also the dominant search engine in Canada, Latin America, and most Asian countries. In Europe, Google has a leading market share of over 90% in the U.K., France, Germany and Spain.

Google’s big investors include Joho Capital, which has a whopping 26% of its total public equity portfolio invested in the stock (see Joho’s top picks).

Another major social network, LinkedIn Corp (NYSE:LNKD), managed to report 1Q EPS results of $0.22, above the consensus. Revenues were up 72.3% from the year-ago quarter, while also witnessing strong performance across all its business segments. Revenues from talent solutions were up 80% year-over-year, from marketing solutions up 56%, and from premium subscriptions up 73% from the year-ago period.

Among LinkedIn Corp (NYSE:LNKD)’s major segments is its marketing solution line, which offers customized solutions to corporate clients. These services are useful to companies’ corporate customers, which help them connect with the right professionals by leveraging the LinkedIn platform, which helps to reduce the costs of candidate selection and recruitment.

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