Seeking the right timing for Twitter IPO
In the previous class, we have talked about how the Initial public offering for Facebook was overvalued; therefore they had lost 50 billion dollars in the last three months.
In July of 2006, this new rising useful tool to build up social network called Twitter was being created. It already has about 140 million active users so far. Compared to Facebook, Twitter has created more interactions amongst the people who have common topics and interests.(point of parity) It built up a platform for people ranging from youngsters to people in middle age to comment on different issues and you can get immediate responses from other people who “followed” you.(point of difference) The source of Twitter revenue comes from the advertisements for companies such as Starbucks and BestBuy, and the total revenue of Twitter is about 140 million dollars in 2010. Now, the question of an IPO is “a decision we’ll make when we think the time is right for us,” he said. I think it is a smart decision for them to hold for the IPO for now as this new rising company is still setting up some new features and mobile advertisement recently.
http://www.theglobeandmail.com/technology/business-technology/
One reply on “Seeking the right timing for Twitter IPO”
I found Claire Choi’s recent blog- “Seeking the right timing for Twitter IPO” to be very interesting and relevant. I believe that twitter’s main “Point of Difference” is the fact that it has created a platform in which ordinary people can interact with famous celebrities, along with their friends of course. I think that this celebrity interaction feature has really been a boon to the social networking website. I agree with Claire, twitter should not have an IPO anytime soon, this is because I think that many investors will be hesitant and unwilling to buy shares of another social networking website, in fear of another over -valuation of the stocks, and rapid decline of the stock’s value. I think that this over-valuation fear will apply to most websites looking to go public in the near future, as investor’s will look to put their money on ‘safe bets’ in an already poor economy.