Twitter Carefully Orchestrating Its IPO Based On Facebook’s Performance At The Stock Exchange

The 140 Character Micro Blogging Network Twitter will soon launch its Initial Public Offering (IPO) in all likelihood on NASDAQ. However, the company is taking multiple precautions to ensure its Stock Performance doesn’t suffer from any of the issues that it’s much larger and rather complex equivalent Facebook, had to go through.

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Unlike Facebook, Twitter will be releasing a small percentage of its shares into the market and that is a very thoughtful move shared Michael Pachter, Director Equity Research, Wedbush Securities, “I think that’s smart of them. The mistake Facebook made was they flooded the market with shares.”

The Securities Company estimates that Twitter could be valued as high as US$ 15 Billion if all its shares start trading at the initial launch price. Though Twitter hasn’t officially announced a date when the IPO will go live, in its own words, its gearing up to launch, “soon as practicable.”

Twitter is currently placed at a very unique position. It is certainly not in the league of Facebook. With over a Billion Registered and more than 600 Million Active Monthly Users, Facebook is way ahead in the race. However, it is not as slow as Google+, which at 60+ Million is still struggling with subscriber acquisition. Twitter currently enjoys routine attention from 218 Million Active Monthly Users and as of June this year, the micro blogging network has achieved a 44% Jump on a Year on Year Basis. Despite earning US$ 253.6 Million, the company’s balance sheet is still red with a loss of about US$ 69 Million.

Such figures make it a very interesting proposition, albeit whose value can be truly perceived by a less number of people. This is perhaps the biggest dilemma of Twitter as it will soon rest its fate in the hands of common investors. Facebook on the other hand assuming it was a well-used household phenomenon, unleashed US$ 16 Billion worth of shares into the market which simply could not digest them and we have seen the ups-n-downs that followed. Do you think Twitter will manage to sail smoothly in the Share Trading waters?

 

Image Credits: cnn

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