Facebook At $200 Billion – Let’s See How It Stacked Against Top-20 Biggest Companies

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Sep 09 2014
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Facebook shares jumped 0.82%, or 63 cents, to $77.89 after yesterday’s closing bell. The stock actually breached the $78 a share during morning session. Nevertheless, a significant milestone has been achieved. Facebook’s market value now has exceeded $200 billion (£124 billion, RM638 billion). At yesterday’s closing, the company has market cap of a whopping $202.52 billion.


Instantly, Facebook is now the 22nd-largest company in the world, behind Verizon Communications Inc. but ahead of Toyota Motor Corp. It’s hard to believe that the company which went public on May 2012 and plunged thereafter to as low as $17.55 at one point, could make such a bullish comeback. Facebook shares had already jumped 81% in the 12 months through Sept. 5, as compared with a 21% increase for the S&P 500.

Facebook Stock Chart - 8Sept2014

Facebook’s revenue for the second quarter of 2014 totalled $2.91 billion, an increase of 61%, compared with $1.81 billion in the second quarter of 2013. Also, its net income was $791 million, up 138% compared to $333 million for the second quarter of 2013. Most importantly, operating margin improves to 48% for the second quarter of 2014, compared to 31% in the second quarter of 2013.


Now, here’s the secret to Facebook’s sustainable profitability – the mobile ads. Mobile promotions accounted for 62% of ad sales, up from 59% in the prior period. In a nutshell, if Mark Zuckerberg’s team can continue to grow their mobile ads, they will have a sustainable demand for their stock. And if they can double their profits, their market cap could doubled to $404 billion and thus can overtake Google, which currently is the third largest company on planet Earth – literally speaking.

Facebook Market Capitalization - All Companies vs Tech Companies vs Social Media Companies

But if you look at Facebook’s valuation in the technology companies itself, Facebook is at fourth place behind Apple, Google and Microsoft. And if you care to compare Facebook in the social media companies, they’re the leader, and there doesn’t seems to have any competitor who can bump Facebook to second slot, for many many years to come.


Needless to say, Mark Zuckerberg, the 30-year-old CEO who founded the company and owns shares that give him 61.6 percent of the voting power in the company, sees his wealth boosted to $34.3 billion (£21.4 billion, RM110 billion). He’s now the world 13th wealthiest person. Not bad for a company that is now have market cap bigger than IBM, Intel, HP, Ericcson or even Yahoo.

Facebook Mark Zuckerberg Latest Wealth

Still, it’s not easy to grow its bottom-line which is always under analysts microscope. Like it or not, Facebook is looking to grow users outside of North America. While North America market users increased only 7% to 152 million in June from a year earlier, its Asian users increased 26% to 228 million. Could Facebook become another giant like Google in the advertising sector? If you believe so, then now is the time to accumulate their shares, and let Zuckerberg do their work growing the company.


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