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Twitter IPO - When, how much and how can you prepare?

Updated on June 3, 2012
Twitter IPO
Twitter IPO | Source

Twitter IPO - When will it happen?

Over the last couple of years we have seen some major internet company IPO's - initial public offerings.

We've seen the successful launch of Linkdin and Groupon, and more recently we have seen Facebook get off to a slightly rocky start after a massive publicity circus surrounding the IPO.

Many have suggested that a Twitter IPO is next on the block- it makes sense considering that twitter is right up there behind Facebook, Google and Youtube as one of the most visited websites on the internet.

If the Twitter IPO is going to happen, it's likely that it will not happen while the Facebook IPO is still establishing a steady price.

Facebook has been a tumultuous affair so far with 2 class action lawsuits being opened against Mark Zuckerburg and Facebook. Twitter will want to wait and see how the Facebook price goes over the course of 2012 before taking the chance themselves.

For this reason Twitter will probably have their initial public offering in late 2013 or 2014. It is very unlikely that Twitter will want to share a media circus with Facebook, they would likely be much happier to wait it out and get alot of the limelight themselves.

Can Twitter make good profits?

Questions have been raised about Twitter's profitablity.

Twitter has massive traffic but the question is how to monetize the traffic.

Twitter make a massive amount of money through the limited advertising that they do, but they need to find ways to expand their profitability if they want to be making enough to be a long term sustainable profits.

There are two ways they can go about this, here are my ideas:

1) Increased advertising.

It's simple, charge money for tweets to appear on very popular accounts on certain topics.

For example, instead of just paying to be in the featured tweets list, users/businesses can pay to appear on certain profiles as a "Sponsored Tweet" or just appear in the side bar as an ad. Twitter has plenty of room for ads in it's sidebars.

Another option for making money off the site is to option a "market" on twitter for downloadable content. Links to items where users can buy products from businesses on twitter and receive an instant-download link. Twitter can take a cut of each sale.

2) Diversification.

Google bought Youtube and various other products. Twitter needs to do the same thing to secure their position as a major internet business. Like the Bible says, putting all your investments in one basket is a bad idea. If twitter loses it's popularity, the whole ship sinks, but if twitter has diversified well, they will sustain the storm

Is now the time to buy early shares?

Some sites offer a marketplace for private investors to buy shares off current twitter stake holders. The problem with this is that you cannot buy small amounts of shares. Sometimes you have to buy an entire block at once which can cost millions of dollars.

The pros: If you pay millions of dollars to become an early stake holder, then the company takes an IPO and the price is much higher then you bought the stock at, you can become an insanely wealthy person in one shot.

The cons: Many risks are involved. First of all, Twitter may never actually take an IPO. If they do not, you will be very hard pressed to find a seller for your stock and you may be in big trouble and you may have wasted a LOT of money. Also, you have no guarantee that the price will be any higher then what you payed for it.

Long before Facebook had an IPO, blocks of stock were selling for Almost 2 million dollars at $31 per share. Yet today Facebook's stock stands at lower then $31. This is an example of a risk that might not have panned out.

So will Twitter have an IPO? Leave your comments and let me know what you think!


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    • aususaeast profile image

      aususaeast 4 years ago from Aus

      Looks today like Twitter have announced they will be having an IPO, about 15 months after this was written. Will be interesting to see how it goes.

    • Angela Brummer profile image

      Angela Brummer 5 years ago from Lincoln, Nebraska

      Very interesting you make me feel like I've been in a cave. I look forward to following your hubs and feeling wiser! Voted up!

    • BraidedZero profile image

      James Robertson 5 years ago from Texas

      I think Twitter moving to the NY Stock Exchange would be a horrible move. It is a company that is in the same position as Facebook. Yes they don't have as many viewers, but they are still pretty big. In order for a company to really make it on the stock exchange they must have a growth plan and they must keep to it, showing growth continuously. This is of course were FB fails because it has no growth! They are a huge company. They can't possibly grow bigger unless they change their market. One of your first points is that Twitter could advertise more. I think that could be a good idea but if they do they would find themselves kicked to the side. No one wants a website where they are bombarded by adds. It will greatly destroy their users. Also, I have read the Bible and I don't remember anywhere where it talks about investing... maybe I read over that part. I don't see how they could move to a different market though. And I personally use Sharespost for my pre-IPO companies. But investing is always taking a chance. If they go live they need to do it before they take your advice. If they do it after they won't have any growth plan for once they do go live.

      Great hub though. I enjoyed it. And sorry for the rant. I'm a big investor so I love talking about it.