Brian Zhou's Blog

Twitter Inc’s decision to go public brings back the memories of Facebook Inc’s initial public offering (IPO) approximately a year and a half ago and raises the question of why Twitter would decide to do such thing. Twitter’s stock rating was issued “buy” from a brokerage firm before Twitter got public; this raised the hype and speculation that Twitter could almost double its stock price within a year. “Twitter’s planned IPO is one of the most anticipated since Facebook Inc’s” yet one must remember, that at the time, Facebook’s IPO was one of the most anticipated as well, and their stock price pummelled. Twitter, like Facebook, leveraged the fact that advertising agencies could invest in their social media platforms to generate more awareness. Twitter boasts impressive resources: it acquired online mobile-advertising group MoPub, has advertising alliances with broadcasters, capture global TV market with Amplify, keyword targeting, search capability, e-commerce, and mobile apps.

Although Twitter has similarities to Facebook, Twitter differs in the fact that it has steady streams of advertising and mobile usage by consumers. At the time Facebook launched their IPO, they were relatively premature in establishing the business-side of things; Facebook let themselves be influenced by the public hype. Twitter also has comparative advantages: Facebook positioned themselves first as the social-media platform to go public and Twitter can fortunately learn from the mistakes made by Facebook. Twitter also offers more value than Facebook due to their 140 character limit and spam filtration: unlike Facebook, Twitter has little-to-none spam accounts. Twitter isn’t the first social-media platform, but it positions itself in the mind of the public as the most personalized and user-friendly social-platform. Furthermore, it is of interest to note that Twitter has never made a profit, rather it remains in debt and that it is expected that Twitter to not gain profit from their IPO.

Read about Twitter’s Slowing Growth and Twitter’s IPO Demise.

Twitter gets ‘buy’ rating even before listing. Chandni Doulatramani. October 7, 2013.
http://www.theglobeandmail.com/report-on-business/international-business/us-business/twitter-gets-buy-rating-even-before-listing/article14722911/

Apart from the “American Dream”, perhaps America’s defining mottos involve the fact that the government is “by the people, [and] for the people.” However, 150 years later, one would have never guessed that the American government is indeed “for the people.” Three days ago, the U.S. Government shutdown due to discrepancy between the Democrats, specifically Obamacare, and the Republicans. Obamacare, in its simplest definition, can be likened to Canada’s Healthcare in which the public obtains health insurance to help offset otherwise expensive costs. Obamacare was rejected by the Republicans and the House which consequently cost 800,000 employees their jobs. Fortunately, the American Government has decided to give compensation pay for their federal employees while the shutdown occurs. Nevertheless, in addition to the federal employees, regular citizens are being negatively affected.

(Photo by Eric Cantor “illustrating” that the Democrats were not willing to negotiate)

In their efforts to shift the public blame of the Republicans (discovered through polls), to the Democrats, they staged a photo where the Republicans sat in a conference table with the Democrats absent. This “stunt” backfired when the Democrats retorted by stating that the past few months have involved Democrats’ multiple attempts to call a meeting with the Republicans refusing. Politics, be it on an international scale or individual scale, remain prevalent throughout business. In this political issue, elements of Porter’s Five Forces are illustrated: Democrats exist similarly to Supplier Power and also provide barriers to entry. The Democrats, the “powerhouse” of Congress, can ultimately decide how to act in accordance to governing rights and laws while the Republicans can only attempt to influence their choices. This shutdown also incorporates barriers to exit; to solve this, Republican House Speaker, John Boehner, could submit a bill without any anti-Obamacare amendments, but doing so would result in high possibility in Boehner “losing his speakership.” As a result, this trivial issue continues to take its toll on the general public while the debt ceiling, America’s actual biggest concern, lies unresolved.

Sources:

U.S. government shutdown: What’s next? Mark Gollom, CBC News. October 4, 2013.
http://www.cbc.ca/news/world/u-s-government-shutdown-what-s-next-1.1875050

House Majority Leader Eric Cantor posts photo of GOP ‘ready’ to negotiate. Leslie Larson, New York Daily News. October 4, 2013.
http://www.nydailynews.com/news/politics/cantor-house-gop-invite-democrats-meet-article-1.1472931