Twitter IPO – #WhatsItAllAbout?
Last week Twitter, a company that brought in less than half a billion dollars last year is now valued more …
Published byAlexis Pratsides
Last week Twitter, a company that brought in less than half a billion dollars last year is now valued more by the market than prestigious and highly profitable companies such as Adidas and Macy’s.
To put this in perspective, this is 47 Mesut Özil’s for Arsenal fans amongst you.
Or 56,800 flights to space on Virgin Galactic for the wannabe astronauts out there.
From an initial offering of $26 a share (which has now jumped to $42.70) the company now has a valuation of over $22 billion. In the process it has helped create 1600 millionaires and produced over $2.2 billion for the US Internal Revenue Service.
So this is a success, right?
Undoubtedly, let’s not forget when Facebook went down this line on 17th May 2012, their share price declined by 16.5% after the first week of trading and was widely regarded as a disappointment.
Conversely, with Twitter shares more than 30 times oversubscribed and the share price not only going up, but staying there, this IPO is fast becoming the blue print for all future tech company offerings.
Right then, how did they do it?
Twitter CEO Dick Costolo and his band of senior executives did their homework. By talking to executives from companies that experienced both good and bad IPOs, they were able to expertly plot a course for the company’s Initial Public Offering.
Additionally they also ensured that no technical glitches occurred as they made the New York Stock Exchange run a complete test prior to the actual IPO.
While Twitter itself is based on a constant stream of short and often forgettable statements and actions, the Twitter executives showed that diligent and detailed work is actually what underpins the company. By expertly canvassing opinion and preparing the market properly, they were able to ensure that the IPO went off without a hitch.
This was vital, as it allowed Twitter to raise a significant amount of money which it can now invest in maintaining its quality service and allowing it to keep innovating.
This finance is also vital for the company to continue to grow its users group as well as increase its ad revenue, all problems it will face in the coming months and years.
So what does this IPO help us predict?
Does this success suggest that the market is once again interested in tech firms, just social media firms, or was Twitter just lucky?
Well, there are no real answers, only interpretations. However, with speculation now beginning to focus on other firms, especially Box, a corporate version of drop box, Air BnB one of the centrepieces of the increasingly popular community marketplaces and Square, a mobile payment system, it looks as though tech firms with a social twist are coming into vogue for finance.
From our perspective this will create a positive impact. As long as the start-up dream realised by Bill Gates at Microsoft, Mark Zuckerberg at Facebook, and now Jack Dorsey at Twitter, continues to be attainable, then innovation will continue with more and more companies and individuals expanding and trying to succeed at the highest level within this creative and technological space.
This can only be good for the industry as it will ultimately give the end user more tools to buy, to sell, to communicate and to live #winning.
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