Twitter IPO | Tech Analysis Blog

Twitter has file for it’s IPO S-1 form at the Securities and Exchange Commission in the USA. It is the most recent big tech based company to file it’s intention to float on a stock exchange after Facebook. The company as most people know, allows users of the social media site to “micro-blog” within 140 characters and gained major popularity after start up conventions such as South by South West (SXSW) and Consumer Electronics Show. Twitter also played an important role when it came to the 2008 US Presidential Elections where people tweeted about their opinions live during key moments of the race.

The networking site has over 200 million active users and has increased its user base year on year since it’c creation in 2006. The company was founded by 4 people with the most prominent being Jack Dorsey who owns 4.9% of Twitter shares and has founded another company named Square, payment solutions. Although the company has millions of active users, the revenue per timeline views is minimal and did not meet market expectations. The fact that this is the main way for the company to make revenues is questionable for the market can be a problem, but investors will still invest due to the push in social networking stocks. Facebook’s share price plummeted over the first 6 months going as low as $17 but has since hit $50 plus dollars, which was driven by increased profits generated by mobile services.

Twitter could experience this growth however it may take years to happen since the company is making a loss on operations for the past couple of years. Twitter needs to find a way to create a way to generate profits from mobile, especially since a majority of its users access the site via mobile applications on smartphones and tablets.

Twitter has seen great popularity especially among celebrities. The biggest celebrities such as Justin Bieber and Lady Gaga have millions of followers and allows them to connect with their fans. Another big change is the need for companies to have a social media presence and Twitter is seen as a way for the companies to interact with consumers. Many companies use Twitter to reply to customer services such as customer complaints as the tweets from customers will be public to everyone to see.

With the problems surrounding the Facebook IPO, Twitter has chosen to use NYSE instead of NASDAQ, even though NASDAQ is home to various other technology based companies like Google, Apple and Microsoft. NYSE is currently undergoing testing to ensure that there are no problems with the IPO and to prevent any problem the NASDAQ stock exchange faced fines from technical problems with Facebook.



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