Twitter Valuation Indicates Huge Growth Potential

November 7, 2013 09:49 by Clayton Reeves in Capital Markets  //  Tags: , , , , ,   //   Comments (0)

It looks like all eyes are glancing to the NYSE today, to see if the stock exchange can pull of the IPO of Twitter without the glitches and issues that plagued the Facebook IPO.  As reported by Dealbook, shares were priced at $26, making the valuation stand at more than $18 billion. The company will raise $1.8 billion from the offering, which should provide quite a pile of cash for acquiring new technologies and expanding into new markets. At this valuation, each Twitter user is worth an average of $78 - although I would estimate that Lady Gaga's account is worth quite a bit more than mine to advertisers!

All things considered, the IPO has gone well for Twitter. However, in the harsh present day reality that internet companies live within, one misstep can spell real trouble. After all, Twitter has lost $300 million over the last three years, and probably won't show profits until 2015. If their users decline, or their revenues slack off estimates, it will be difficult to maintain this lofty valuation. Even so, investors are excited, and Twitter's pockets are lined with cash - the tell tail signs of a successful IPO.

Read the entire article here.

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