Just How Much Is Twitter Worth?

Twitter is expected that when it launches its initial public offering (ISO) of shares in the very near future, that it will raise between $1.4 to $1.6 billion depending on how many shares are initially offered. This will put the value of the company to about $11 billion. The company is mindful of the hullabaloo that surrounded Facebook’s IPO in May 2012 where Mark Zuckerberg’s company’s share price debuted …

 

By Mike Wheeler

Twitter is expected that when it launches its initial public offering (ISO) of shares in the very near future, that it will raise between $1.4 to $1.6 billion depending on how many shares are initially offered. This will put the value of the company to about $11 billion.

The company is mindful of the hullabaloo that surrounded Facebook’s IPO in May 2012 where Mark Zuckerberg’s company’s share price debuted at $38 and quickly sunk to around the $17 mark before recovering to the $51.95 price it was at by close of business of Friday.

Analysts are saying that the list price is modest and shows that the company is cautious about what the public expectations will be for the company’s ability to generate revenue. Currently Twitter makes its money by offering promoted tweets to be bought by companies. It also has its Twitter Ads self-service advertisements platform which is available for both small businesses and Joe Public.  It is claimed that by the end of 2013 the company is expected to have $1.5 billion in revenue, although it did not elaborate on how it planned to bring in the money over and above current methods.

However, with more than 200 million current users, and no signs of its popularity waning, investors are tending to look favourably on the offering mainly due to the lack of not only hype but over-exaggeration of its performance either currently or potentially. While there is still a question mark on how it intends to justify even a modest $11 billion valuation, analysts do believe the company is still aiming for a strong IPO, which is expected to go ahead within the next month.

 

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