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Twitter Looks to Learn from Facebook’s IPO Mistakes
Posted by: Monica Wolfe (IP Logged)
Date: September 24, 2013 05:21PM
Looking to learn from its social media competitor’s IPO mistakes last year, Twitter announced via a tweet that it would be listing the company on the New York Stock Exchange. Twitter announced that it engaged in an IPO estimated to net around $1.5 billion. In its tweet the company announced that it had filed its S-1 to the SEC for its planned initial public offering. The company is definitely attempting to avoid the glitches and ultimate flopping of Facebook (FB)'s IPO last year.
Facebook is listed on the Nasdaq exchange and is on its way to selling more than $16 billion worth of stock, making it the largest tech offering in U.S. history. Twitter seems to be taking a different approach. It’s reported that the company could and might sell between 50 million and 55 million shares in that offering in the price range of $28 and $30 per share. This transaction would raise the company anywhere between $1.4 billion and $1.65 billion for the IPO and would value Twitter at $15 billion to $16 billion. The sources reporting on this transaction have also noted that nothing is set in stone yet, and that both the initial float as well as the pricing could easily change.
Santosh Rao, a senior analyst at Greencrest Capital Management, reported in an article for Yahoo Finance that “it usually takes at least 30 to 60 days of discussions before a deal can be reached with the SEC and therefore the IPO should happen at the end of the year or early next year…”
Rao also noted that the company has several options in moving forward for increasing revenue growth and that it should not be a problem because the company is already experts in “mobile monetization.”
Other sources have estimated that Twitter’s revenue could be up to $750 million for fiscal year 2013.
It was also recently announced that CBS (CBS) would become Twitter’s biggest partner in the television industry. Both companies announced that they would be selling sponsored video-based tweets for 42 of CBS’s shows as well as many of its internet subsidiaries this fall. CBS and Twitter made this announcement as a part of New York’s Ad Week. This new ally will become a part of Twitter’s Amplify Program. The Amplify Program lets media companies place sponsored tweets with embedded video, which allows the companies the opportunity to connect with audiences on TV and online. It would appear that Twitter is increasing its efforts to generate revenue from TV networks, ahead of the company’s IPO.
The company seems to be flourishing, especially now since, according to The South China Morning Post, Facebook, Twitter and other social media sites will be unblocked in a free-trade zone of Shanghai.
Twitter makes most of its money from advertising, but it has always been significantly less than the funds received from Facebook (FB) and Google (GOOG). We’ll just have to wait and see what the IPO holds for Twitter’s future.
Stocks Discussed: FB, GOOG, CBS,
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