TWITTER ANNOUNCES IT IS READY TO FLOAT ON WALL STREET – Who would have thought that you can turn 140 characters of text into a company that is expected to float on Wall Street for £7 billion?
Twitter is by all sense a quirky idea that certainly appealed to millions of people. It is after all quick and easy to add a tweet which has the ability to drive significant amounts of traffic to other websites – if used correctly.
Twitter also allows for the public to stay current with what’s going on from news articles on meebal.com to what’s happening on the celebrity scene.
Twitter is not just about news or celebrities but provides a forum for open discussion and to create new ideas.
Yes Twitter is a highly successful online company whereby some 500 million tweets are posted on a daily basis.
As for the revenue model, well it doesn’t look too bad as in the last year alone Twitter trebled its annual revenue to £200 million; although it does have to be said that despite the growth in last year’s revenue it still posted a loss of £50 million.
Twitter is now just 7 years old and after launching in 2006 has become one of the premium social networks for both business and personal users.
Twitter has now filed documents with the U.S market regulators ahead of the float and these indicate that Twitter has yet to turn a profit from its operating income. Twitter has announced that it is on target to turn a profit next year; but will this be enough to woo investors?
I suspect the markets for tech stocks, especially those in the social media arena, will treat Twitter’s flotation with trepidation and caution.
The failing stock price of Facebook is still very fresh in the minds of investors of which they have truly felt a sting after buying at its opening price only to find the stock price plummeting.
Yes Facebook has recovered slightly but its current stock price remains woefully short of its opening price of $38 per share
So what is under the hood? Looking inside Twitter it does have an army of 250 million people using Twitter every month; nearly 100 million of those post one or more tweets a day. It’s certainly impressive and every small websites dream to be able to attract such vast numbers of dedicated users.
Like anything there is a darker side as Twitter is often used by trolls, criminals and even terrorists; but that is par for the course and it goes without saying that a successful enterprise will attract elements from all walks of life.
The owners of Twitter now plan on floating the company as early as November 2013 but whether it can attract the investors it hope is another entirely different matter.
During Facebook’s float I came very close to buying shares but for me the numbers simply didn’t add up. Yes it had all the right elements, most notably the vast number of users, but whether these can be turned successfully into clients for firms looking to advertise is another matter altogether.
I like Twitter due to it being quick and easy to use but as a website owner I’m not convinced I would engage in advertising placement and therefore I for one will abstain from buying shares at its float; of course I could be wrong.