IB Net Payout Yields Model

Buy Twitter If Instagram Is Worth $35 Billion


  • Citigroup analysts assigned a $35 billion valuation to Instagram that is only now monetizing the user base.
  • Instagram and Twitter have comparable logged-in user bases, though the former is growing faster.
  • Twitter is significantly ahead of Instagram on the monetization path, and provides an attractive valuation compared to Instagram that is part of the significantly larger Facebook.
The absurdity of a $35 billion valuation on a company division that is barely producing revenue is comical, but that is the valuation assigned to Instagram by a Citigroup analyst. The market and especially investors in Facebook (NASDAQ:FB) that bought the social picture sharing service for $1 billion were initially excited about that news. Clearly, Facebook got a great deal at the $1 billion valuation, but investors need to wise up to the proclaimed valuation.

Read the full article at Seeking Alpha.

Disclosure: Long TWTR via GSVC. Please review the disclaimer page for more details. 


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