It was a sunny morning November 7th 2013. Wall Street was awaiting the heightened anticipation of the most recent talked about IPO (Initial Public Offering) Twitter. It wasn’t just a sunny morning for those who had invested in the company, but it was glorious and peaceful for the owners. CEO Dick Costolo and Chief Financial Officer Mike Gupta of Twitter can breathe a little easier, and for now, can sleep easy.
The initial public offering of $1.8 billion for Twitter on thursday morning, translated in to starting share price of $26. However, it did not sit for long, leaping and bounding almost reaching the landmark of $50, just to fall short and rest at the end of the sunny day at a price of $46. As of today the market valuation is now around $27 billion.
Twitter seems to be having brighter days compared to its counterpart Facebook, who had a troubled IPO last year that faltered, danced, played games and finally began to appropriately climb in value. Twitter has made history as being the largest IPO in the US technology market ever.
Chris Sorensen’s business blog in MacLeans raises awareness that every sunny day must come to end, as fog and clouds roll in. Even though Twitter showed a fast-growing sales proposition, the company is at the root of facing significant challenges. He first draws evidence to the companies financial history….non-existent. Twitter has never made a profit in its seven years of existence. Mr. Sorensen describes to his readers about the size of Twitter being a mere fraction to its competition, Facebook. Finally, the clouds seem to settle on the restriction of Twitter being unable to place ads, due to the fact that “Tweeters” more often than not “tweet” on their mobile devices that have smaller screen sizes, that constrict space for profitable advertisements.
Will the bright days be consumed by clouds of challenges that could result in a decrease in stock value for Twitter? Or could there be a possible rainbow at the end of the storm?
Only time will tell…
