Twitter IPO Set To Debut On Wall Street

twitter_moneyShares of Twitter will begin trading today on the New York Stock Exchange (NYSE) after the social networking company raised $1.82 billion yesterday or 70 million shares during its IPO offering.

Twitter priced its initial public offering at $26 a share late in the day on Wednesday, surpassing the $23-25 level the company established at the beginning of the week due to rising demand for its shares.

At $26 dollars a share, Twitter’s value as a company is $18 billion with fully diluted outstanding shares and options.

Twitter is a free online social networking and microblogging site that allows users to send and read “tweets”, or short text messages limited to only 140 characters.

Founded in 2006 by Jack Dorsey, Evan Williams, and Biz Stone, San Francisco based Twitter has grown to 232 million monthly users in the world based on 2013 3rd quarter data and yet the company is still unprofitable and has a much smaller user base than Facebook did at the time of its IPO.

Comparatively speaking, Facebook currently has 1.19 billion monthly users and LinkedIn has 259 million.

Twitter may not even show real profits until 2015.

Twitter users can tweet about virtually any topic and include links to other content in their tweets, and their messages can be marked public or private.

Politicians, celebrities, and journalists have used Twitter to develop followers and connect with their fan base.

Media outlets are increasingly known to use Twitter as a way of broadcasting breaking news for an online audience.

In October ratings company Nielsen announced the commercial launch of Nielsen Twitter TV Ratings, an industry standard metric that is based entirely on Twitter data and measures the total activity and reach of TV related conversations on Twitter.

Broadcasters are eager to provide new ways to drive viewer engagement and generate more buzz.

Twitter provides a real time forum for its users to share their opinions about a variety of topics such as media programs, sporting events, or political events.

Twitter relies heavily on advertising revenue to fund the company with 70 percent of revenue coming from mobile advertising.

Twitter received only 26 percent of its revenue from international markets last quarter but 77 percent of its users come from outside of the United States.

According to the research firm eMarketer, Twitter is projected to gain only 0.5 per cent, or $580 million of the total spending on worldwide digital advertising this year.

In the third quarter of 2013, Twitter’s active monthly user base grew by 39 percent compared to the same year ago quarter which is lower than the 44 percent growth rate that the company saw in the second quarter of 2013.

Third quarter revenue growth climbed impressively to $168.6 million from $82.3 million in the same year ago quarter.

But Twitter’s net loss ballooned to $64.6 million in the third quarter of 2013, up from $21.6 million in the same year ago quarter, marking Twitter’s worst quarterly loss on record as the company seeks to expand and invest in its core business.

Twitter co-founder Evan Williams is the company’s largest individual shareholder with a 12 percent stake that is valued at nearly $1.5 billion.

Twitter will begin trading Thursday morning on the New York Stock Exchange under the ticker symbol TWTR.

Twitter’s underwriters include Goldman Sachs, Morgan Stanley, JP Morgan, Deutsche Bank, and Bank of America- Merrill Lynch.

 

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