Wednesday, November 13, 2013

Twitter IPO

The recent Twitter IPO has caused a lot of excitement recently and for good cause. It's now been a while since Facebook's dramatic IPO, and I think that played a big part in the stir surrounding Twitter. People were eager to compare the two entrances to the stock market and see who would come out on top. Although it is hard to compare at this point, considering that Facebook's stock has now matured a bit and Twitter's stock is still so young; it certainly seems that Twitter has some serious potential in the market. The stock skyrocketed after the IPO, and although it will probably taper slightly it will still be well above it's opening price. Twitter has been criticized for setting such a low initial price, which caused them to miss out on possible money. After watching Facebook's IPO I find it hard to criticize considering how much of a drop Facebook's stock experienced. I'd say Twitter had a much more successful entrance to the market, however I don't believe it will last. I never had much faith in Twitter's business model because of it's meager expansion opportunity. Twitter's network of social media is inherently single focused with its140 character messages, as opposed to Facebook which is takes a "jack of all trades" approach to networking. After the initial few months of trading, this could lead to several more disappointing quarters from Twitter and a drop in stock price. Only time will tell though.

2 comments:

  1. Is Twitter aware of this "stock-price bubble?" Do its investors plan to sell quickly after the buzz comes down?

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  2. These are the very concerns that both Twitter and its investors have been voicing. They wanted to set the price conservatively to offset worries about valuation and to prevent a crash. But then it appears that they might open themselves up to this possibility all over again. Time will tell, though, as you say.

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