Tuesday, 8 October 2013

Twitter IPO. Looks like November 8th trading day.

Twitter's IPO is probably the most awaited floatation since Facebook.

Although still loss-making and small, it is growing and has revenues of 448 million usd in the last year, twice that of LinkedIn when it floated two years ago. LinkedIn then, was valued then at 4 billion usd (now it's 27 billion usd) and Twitter IPO expectations have been between 10-15 billion usd. Facebook we will all sorely remember, peaked at 100 million usd.

Twitter will shortly begin their investor roadshow and The FT have reported that a first day of trading is likely to be November 8th. Of course, they'll need to convince investors first, that they've turned a corner and will be showing greater future profitability. Twitter's revenues largely come from US traffic although it only accounts for 23% of Twitter usage, so reaching out globally, will be key. It needs its advertising to be better engaged outside of the US.

What Twitter needs to do is to instill confidence that it can generate good solid money in the longer term through advertising and avoid the hyped webby valuations. Facebook lessons still hang in the air and it's fair to assume that this IPO will be more measured, more considered.

Notwithstanding that, Twitter has a big following as being a good all round Social Media player with longevity. It's less "flash in the pan" and more down to earth with its potential for profit, still largely, unproven.

But all of these IPO's get the market's blood rushing. It's an opportunity for Wall Street to turn a profit quickly on "Mom's and Pop's" shares. So we will see their hype rather than Twitters. So be warned of pre-IPO publicity.

But, it's probably a good buy because getting on board now, in a reasonable IPO, reminds one a little of Apple founders. 

What Twitter does is good and growing. 
That's the fundamental.