How much is Twitter worth? How fast is the company growing? Do they really make money? Investors are clueless. Still waiting for details, they don’t know how many shares of the social media company will be offered, the timing of the offering, the price of the shares. The firm decided to provide its IPO registration privately to the SEC, under a new law that allows confidential filing for “emerging growth” companies with revenues of less than $1 billion.
Some private companies put the seven-year-old social network at around $10 billion. Michael Pachter, an analyst at Wedbush Securities, believes Twitter was now valued at $15 billion to $16 billion, based on buying in the private market, the NYT reports.
This much-anticipared operation, of which Goldman Sachs is the principal underwriter and insurer, has stirred a big debate on the media and, of course, among the social network users, who also joked using the hashtags #TwitterIPO and #longwait.
“What people don’t know is that all they are offering to shareholders is a pile of wasp eggs,” a netizen said.
“It’s like watching your nephew drink their first beer or listen to their first metallica record,” another joked.
Analysts predict that if it goes public soon, Twitter may benefit from a terrific IPO market for technological companies. Some critics argue that the company might struggle in the beginning as it happened to Facebook, although Mark Zuckerberg’s firm is now trading at high levels.
Money from ads
Since Dick Costolo became its CEO three years ago, the company of the icon bird has a new driver : to make money from advertising. This year it is expected to earn $583 million in ad revenue, according to eMarketer.
So far Twitter has collected $1billion in private financing from the venture-capital sector and funds, the WSJ reports, including money to cash out some of its staff members and early investors.
The public won’t get to see financial documents until three weeks before the stock market debut. The company now needs to prove it has the power to attract advertisers and the muscle to grow in the long term.