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Ask a Fool: Is Twitter's Valuation Fair?

By David Meier - Feb 24, 2014 at 4:22PM

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Can Twitter really be worth that much without making a profit?

In this video from the Motley Fool's "Ask a Fool" series, Fool analyst David Meier takes a question from a Fool reader, who asks, "Do you think Twitter (TWTR 1.19%) will maintain its stock value when they have made no profit vs. Facebook (FB -0.49%) who is profitable?"

David reminds investors to think of Twitter not in terms of its current profit, but of its future profit. He highlights strong growth in three categories: the service's number of users, the number of advertisers coming to the site, and the amount that each advertiser is spending. While it's unclear whether this is a recipe for growth that will drive Twitter to reach the size of Facebook, David feels it will certainly drive major revenue growth for Twitter down the line.

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Stocks Mentioned

Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
FB
$191.29 (-0.49%) $0.95
Twitter, Inc. Stock Quote
Twitter, Inc.
TWTR
$37.29 (1.19%) $0.44

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