Mark Mahaney Thinks Facebook Will Be Biggest Beneficiary Of Mobile And Video Advertising And Can Take Twitter's Total Adjustable Market (TAM)

While shares of Facebook Inc FB are trading at their all-time highs, Twitter Inc TWTR's shares continue to languish in the mid-30 figures. RBC Capital analyst Mark Mahney was on CNBC Wednesday to discuss where the stocks of these two companies are headed from here.


Mahaney was asked what Facebook is worth currently. He replied, "They are worth $105, that's our price target. At one time Facebook probably was worth $15 because they couldn't figure out mobile. Once they figured out mobile - which is where all their dramatic growth has been over the last 3 years- then the stock deserved to appreciate to go higher. It just hit a all-time high yesterday. Maybe there's a little bit of positive sentiment about Oculus Rift coming out of the E3 conference last year."

He continued, "We are starting to see more apps within Instagram, that's the greenfield opportunity. That can probably generate $2 billion in new revenue for the company next year and what's the big theme in internet advertising this year? Mobile and video and Facebook is probably the single best derivative of that trend.


On his current outlook for Twitter, Mahaney said, "We are on sidelines on twitter. We haven't recommended the stock in quite some time, we did after the IPO. There's too much of wood to chop at that company both in terms of fixing the product for user and fixing the product for advertisers. There's a lot of uncertainty about it. If one company can take out the other's TAM or total adjustable market, it's more likely to be Facebook taking up Twitter's TAM than the other.

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