Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Citigroup Inc (C) Adds $16 billion to Facebook Inc (FB)’s Valuation

By significantly increasing its valuation for Facebook Inc (NASDAQ:FB)‘s picture sharing platform, Citigroup Inc (NYSE:C) has turned Facebook into an attractive investment opportunity, given the levels that the stock is currently trading on.

Facebook Inc (NASDAQ:FB)

On CNBC, Mark May, Citigroup Inc (NYSE:C)’s analyst shed some light on why Facebook Inc (NASDAQ:FB)’s platform was now worth $35 billion as compared to the $19 billion valuation that it had achieved before.

“[…]The way we look at valuation for companies like this is looking at what their potential is and trying to discount that based on different risk factors, and that is kind of the exercise that we have done here […],” said May.

This potential meant that the valuation was based on full monetization of Instagram, something that Facebook Inc (NASDAQ:FB) has not yet achieved. However, there are still a couple of factors going for Citigroup Inc (NYSE:C)’s analyst, which add weight to his new valuation.

“[…] Instagram is performing incredibly well from a users stand point, user engagement is incredibly high. We think that twice that of a typical Twitter user and we also now have a lot of benchmarks for how these social media properties are monetizing and it’s working. Advertising is working on sites like Twitter and Facebook Inc (NASDAQ:FB) […],” explained May.

Back in 2012 some people thought that Mark Zuckerberg overpayed for Instagram when he dished out a billion dollars to get the platform under Facebook Inc (NASDAQ:FB)’s umbrella. I think that a return of $35 billion on $1 billion in two years should help those critics take another look at the steadily growing online advertisement industry.

Facebook Inc (NASDAQ:FB) was up about 1.8 percent for the day, when the closing bell rang. The stock is up nearly 48% year to date.

Video Embed Size: 530 X 298 640 X 360

Warren Buffett and BillionairesFree Report: Warren Buffett and 12 Billionaires Are Crazy About These 7 Stocks

Let Warren Buffett, David Einhorn, George Soros, and David Tepper WORK FOR YOU. If you want to beat the low cost index funds by an average of 6 percentage points per year look no further than Warren Buffett’s stock picks. That’s the margin Buffett’s stock picks outperformed the market since 2008. In this free report, Insider Monkey’s market beating research team identified 7 stocks Warren Buffett and 12 other billionaires are crazy about. CLICK HERE NOW for all the details.