Twitter’s IPO

Twitter has been gaining headlines due to their recent announcement of their IPO (Initial Public Offering). Many economists and future shareholders were concerned due to the inital disappointment and inaccurate predictions of Facebook and wondered if the same was going to happen to Twitter.

Twitter announced their IPO as $26, and “Reuters estimated the 70 million Twitter shares being offered today were set to raise just over $1.8 billion and valued the company at $14.1 billion” due to high demand of Twitter stock; “this would make Twitter’s IPO the second-largest U.S. Internet offering in history, behind Facebook, and make it even more valuable than Google’s 2004 IPO”. However Twitter easily surpassed their IPO of $26, and its stock price opened at $45.10 (US).

Twitter made sure not be over-zealous and not set a market share too high, learning from Facebook’s mistakes. Facebook shares had rapidly decreased once they hit the market but they are now recovering.  Twitter was determined to not follow in Facebook’s path, so they initially set a lower IPO of $17-$20 to keep investment expectations low in case of failure.

I believe Twitter was wise to set a low IPO in case of consumer expectations were not high, but as Twitter gains shareholders, they have created their own path to public ownership.

http://ca.finance.yahoo.com/blogs/dashboard/twitter-ipo-puts-social-media-trial-135438367.html

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