Twitter’s (TWTR) first day of trading was a banner one. The stock priced at $26, shot up as high as $50.09 and closed the day at $44.90 a share, notching in a sweet 72% first-day gain from the IPO price.  But Facebook, just a few years ago when it launched its IPO, has much worse result than they expected.

Interestingly, Matt Nesto at Yahoo Finance pointed it out as the “4 Reasons why Twitter’s IPO Rocked Where Facebook’s Rolled”. In the blog he mentioned different factors such as timing, choice of financial markets, and the “First is Worse” theory. It is interesting to note that, rather than “first come first served”, Facebook as the first comer didn’t grab that much attention from the investors than twitter did.

Social media industry might be very different compared to the existing technology companies. They don’t have a complicated business plan as tech firms, some of them probably even haven’t thought about having one. The future of social media industry in the financial market would be ambiguous, since no one actual knows how they generate profit apart from advertising, which might be attractive to investors because the great potential it has based on unknown. What twitter does is probably try to grab more investors’ interest on the company and at the same time reduce the uncertainty the company creates through references of the former company Facebook.

“There’s a reason why test pilots are typically well paid and young. Along that same line of thinking, it would be hard to overstate the benefits Twitter derived from watching Facebook enter the public domain. But watching is only half the battle, since Twitter clearly watched, took notes, and then made sure not to repeat the same mistakes.”