Reporters and analysts have been saying for some time now that the changes and acquisitions Twitter has made in the last year or so were leading up to an inevitable IPO. Last night, Twitter sent out a tweet that confirmed the speculation and stated they have submitted an S-1 to the SEC in order to go forward with a planned IPO.
Will Twitter’s IPO Be Like Facebook’s?
I really doubt that Twitter would take the risk to go public in the manner that Facebook did. Facebook has only now recovered from that train wreck of an IPO. In a sense, it looks like Twitter has been doing all of its homework ahead of time, making the changes and acquisitions it needs to ensure its IPO goes smoothly and it has the tech and talent to continue growth. Just this week I wrote on the CEM blog about Twitter’s acquisition of MoPub, a company that will help it lure in more advertisers.
What are we looking at when it comes to Twitter’s value? Alex Wilhelm reports for TechCrunch that “we don’t know much, but expect … a valuation of roughly between $15 billion and $20 billion.” That’s a far cry from Facebook’s eventual valuation of around $100 billion (which made it one of the highest valued IPOs in history). Still, we all know the problems that kept Facebook’s stock under-valued for over a year and tarnished the entire IPO process.
Why such a low valuation? Juliette Garside for The Guardian sought out the answer to that question from Sam Hamadeh (chief exec at PrivCo), who said, “Unlike Facebook, which waited too long to IPO (until its growth rate decelerated), Twitter will IPO at just the right inflection point.” That just right inflection point is in reference to the fact that Twitter’s revenues are growing “in triple digits.”
Things Are Looking Up for Twitter
If all goes smoothly with the IPO, as it should, I think things are looking good for Twitter. Peter Kafka and Mike Isaac have written an excellent piece about Twitter’s future growth, strategy, and where they stand now over at All Things D. One part that stands out to me is the fact that Twitter “has only started ramping its ad sales in the last two years, and has deliberately held back some ad products so it can show a steady growth rate.”
Given all of this information I can’t see things going as roughly for Twitter as they did for Facebook. I certainly expect to see a steady series of changes and additions to its products and offerings though, much like Facebook did over the last year. Although, Facebook appeared to be scrambling to please Wall Street until its recent success and recovery from its IPO fiasco. Twitter will likely be making these changes in a much more planned and deliberate manner.
It’s certainly going to be fun to keep an eye on Twitter in the coming years.
What do you think about Twitter going public? Should they be doing so?
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