Market Overview

Kim Kardashian's Sexy Picture Validates Facebook's $1B Instagram Acquisition


Ever since Facebook (NASDAQ: FB) announced that it will acquire a mobile photo sharing app, Instagram, for $1 billion, people have raised questions about the enormously high valuation of the company that does not currently generate any revenues. The validation for Mark Zuckerberg's latest deal may have come from a surprising source. A reality-TV star, Kim Kardashian, shared a sexy picture of herself with her Instagram followers generating a plenty of media buzz today.

Prior to Kim Kardashian's exposing picture, Instagram has been seen as a tool for Average Joes and Plain Janes to share their pictures with friends and Twitter followers. However, after all the media coverage that Kardashian's half-nude picture received, other celebrities might become more and more inclined to use Instagram to connect with their fans.

The increase in celebrity users could lift Instagram to the next level to even compete with Twitter, which currently has a valuation of approximately $10 billion. Just imagine what happens when Miley Cyrus discovers the true potential of Instagram! Looking at this way, Mark Zuckerberg may have made an incredibly genius acquisition, which in the long run could also help Facebook's share price that has fallen nearly 30% from its IPO price and currently trades below $28.

An increase in Instagram's value could also increase Mark Zuckerberg's credibility on the Street, which has been just as fast as Facebook's share price. It is safe to say that a $6 billion valuation on Instagram could silence even the critics of Zuckerberg's wardrobe. Meanwhile, we can just enjoy the photos Instagram currently has to offer.

Posted-In: FacebookLong Ideas Movers & Shakers Success Stories Startups Media Trading Ideas General Best of Benzinga


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