Twitter Goes Public

Twitter Goes Public

1000 Words /

Twitter officially has gone public, and did very well on it’s first day of public training. The company raised billions for stocks, and social-networking stocks. The company and its underwriters, led by Goldman Sachs, whose CEO is Lloyd Blankfein, priced the shares at $26. This gives the company a value of $18.1 billion, including stock that the company will most likely give to employees.

According to The Huffington Post, trading was delayed for over an hour after the actor Patrick Stewart rang the NYSE opening bell at 9:30am while market specialists sorted out buy and sell orders for the stock.

This is good news for the company, who had over $300 million in losses in the last three years – they aren’t expected to show real profits till 2015. “One day Twitter will make money,” said Anup Srivastava, an assistant professor of accounting at Northwestern University. “But it’s not clear why anyone should pay this much for it today.”

Investors see the company becoming very profitable in the next couple of years, due to advertisers paying to reach customers. “The possibilities and opportunities afforded by the platform are limitless,” Dick Costolo, Twitter’s chief executive, said in a company presentation to promote the offering.

A similar social networking site, Facebook, found ways to increase their advertising revenue but a lot. Many investors expect that Twitter will do the same.

“Consider a company that correctly claims it has a hundred million users, and that the rate of user growth is expected to continue to grow at double-digit rates,” said Mary Jo White, the chairwoman of the Securities and Exchange Commission. “What if the bulk of the growth in the number of users is in an area where the company has not yet figured out how to turn those users into paying customers?”


About DevonJ140
I am currently an Accounting Director living in New York City. I love reading and learning more about business, finance, tech, and current events.

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