One story that has caught my attention in the past few weeks was Twitter announcing its Initial Public Offering. Twitter made the announcement last Thursday in form of a tweet. The announcement sent the Internet into a furry wondering how the decision to go public will go for the social media juggernaut. Many comparisons were thrown out between Twitter, and Facebook whom also recently went public in 2012. Facebook’s IPO wasn’t as successful as the company had hoped, but investors and analysts believe Twitter won’t face many of the same problems.
One of the main problems with Facebook’s initial public offering was the timing. The company had already reached its peak, and had many questions on how to gain revenue through advertisements. Twitter on the other hand, finally reached $500 million annually in revenues, has continued growth in advertisement revenues and recently acquired companies to assist in the growth. Also, the recently enacted JOBS Act, has allowed Twitter to question investment analysts about the offering before going public. This will help Twitter’s IPO transition much better than Facebook.
Overall, there is optimism surrounding Twitter’s IPO, and many believe it will be similar to LinkedIn success rather than the struggles Facebook went through. Twitter was successful in being very secretive about the IPO, and hired Goldman Sachs as their lead banker. Many believe Twitter will also offer shares in twenty-one days, the minimum time period after filing their S-1. Regardless of what happens, I will be watching the news over the next month to see what comes of Twitter’s IPO.