Cramer: Facebook Is Not An Expensive Stock, When You Are Talking About 2017

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When Facebook Inc FB had acquired Instagram back in 2012 for about $1 billion, critics argued that it was an unwise decision. The same story repeated itself in the $19 billion WhatsApp acquisition last year. However, the kind of growth these acquisitions are having and the valuations being attributed to them now has proved that those were some of the smartest decisions made by the company.

CNBC's Jim Cramer remarked on how the Street continues to underestimate Mark Zuckerberg and Facebook is not an expensive stock.

People Continue To Underestimate Mark Zuckerberg

"It [the Instagram acquisition] turned out to be amazing," Cramer said. "I think that WhatsApp, which everyone had a real good laugh at it, is probably going out turn out to be something that brings in a couple of billion people on Facebook and this is a man who people continue to underestimate."

He continued, "The stock broke out yesterday, a lot of people say it’s a short squeeze. I have been saying that the stock should have been here anyway because the quarter was so great and these kind of valuations are not wrong."

Facebook Is Not Expensive

"Now, remember you also have all these venture capital valuations like yesterday it was Pinterest, is that possibly worth that? Uber... No. Facebook is an immensely profitable company. Do not confuse lack of profit with profit. Facebook is not expensive, when you are talking about 2017 and that's the way they do it," Cramer added.

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Posted In: CNBCJim CramerMediaInstagramMark Zuckerberg
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