Twitter makes strong IPO debut, now real work begins

Twitter makes strong IPO debut, now real work begins

Summary: Twitter didn't grab every dollar possible when floating its initial public offering. As a result, Twitter shares are up nicely, but the company still has to grow into its valuation.

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Twitter made its public market debut and shares surged, but the real work is just beginning for the company: It has to fill out its potential and business model.

Shares of Twitter were trading at $46 or so, up 77 percent, from its offering price of $26.

Unlike Facebook, Twitter didn't grab ever dollar available and aim for perfect IPO pricing. As a result, Twitter enjoys better headlines, a return for those investors in at the offering price and a little bit of a glow.

But let's get real: Twitter isn't as mature as Facebook was when it went public. Twitter lost $133.8 million for the nine months ended Sept. 30 on revenue of $422.2 million. The company's business model, which largely revolves around promoted tweets, is also a work in progress.

twtr financials

 


In Facebook's latest quarter, the company showed its monetization potential and looked like a company that knew the balance between growth and profits.

If all goes well, we'll see something similar from Twitter. After all, Twitter will have to grow into its current market valuation of more than $30 billion.

Topics: Social Enterprise, Tech Industry

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3 comments
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  • The only money to be made with Twitter and Facebook, is throught stock

    sales. IOW, they won't be showing earnings from sales, and if they do, it will be very minor and unnoticeable.

    Investors are hoping to score big, via stock trades. IOW, buy low and sell high. Earnings for Twitter and Facebook will take a long time before anyone talks about them seriously. Even Google, which is heavily dependent on page clicks and advertising, isn't showing spectacular earnings, when considering the price of the stock and the number of years it's been a public company.
    adornoe
  • Twitter is....

    ...already signing up for all those wonderful corporate tax breaks that mean you as ordinary working citizens pay more in taxes (by comparison) than Twitter or like companies do.

    So glad I don't have a Twitter.
    Rilriia
    • Ain't no such thing as a "corporate" tax break...

      Bet you won't be able to figure it out.

      ;)
      adornoe