Twitter, popular micro-blogging site with 200 million users globally is likely to enter the US stock market by the first quarter of 2014 with $15 billion public offering.
“Twitter Inc plans to file for an IPO as early as the 4th quarter of 2013, and plans to go public in the 1st quarter of 2014,” said US-based PrivCo, a provider of business and financial research on big privately-held companies. “Twitter will learn from Facebook’s flawed playbook and do the opposite. Twitter will conservatively price its IPO at 30 times revenue, or $ 15 billion,” says Sam Hamadeh, CEO of PrivCo.
Facebook hit the US stock marketing with $16 billion initial public offering in May 2012. According to PrivCo, Twitter’s potential IPO is based on the recent financial strategies it has taken to increase the revenues. The micro-blogging site generates revenue through promoted tweets, targeted tweets for advertisers and partnership with Pinterest, the photo-sharing site.
According to the estimates by PrivCo, Twitter’s revenue could reach the $500 million mark this year. In 2012, Twitter is likely to experience a significant jump in its revenue; the revenue is expected to touch $245 million in 2013 from $87.5 million of the previous year. This might be the result of Twitter’s aggressive expansion at the international level.
“Unlike Facebook, which waited too long to IPO (until its growth rate decelerated), Twitter will IPO at just the right inflection point: while revenue grows in triple digits and with its final pre-IPO quarter reported at its seasonally strongest fourth quarter,” Hamadeh added.
Facebook and two others big brands Zynga and Groupon filed IPO in 2011 and struggled a lot in terms of growth. However, Twitter has been experiencing a steady growth so far, especially in mobile advertisement. Twitter pushed down Facebook in mobile advertisement in 2012 which shows that the micro-blogging site is observing good traction there.
Twitter is still a small fish compared to Facebook in terms of revenue; however, the micro-blogging site has observed steady organic growth so far. Now is the time to see how Twitter’s IPO thing goes.
Source | The Economic Times
Image Courtesy | stocksonwallstreet