Twitter Files For IPO, But Will It Be Facebook Part 2?

twitter ipo tweet announcement

Hopefully – not.

Twitter announced Thursday via a tweet on its own media network, We’ve confidentially submitted an S-1 to the SEC for a planned IPO. This Tweet does not constitute an offer of any securities for sale. the company would be going public.

The influential social media site is already being compared to Facebook as another possible botched IPO.Facebook was the most highly anticipated initial public offering in recent years and the current prediction from many analysts is that Twitter will also bring in retail investors who could get burned.  Facebook opened at $38 and soon fell to $18 dollars.  It’s now close to the all-time high at $45 dollars.

Investors could get hurt early again if too many investors hear about the IPO and the hype outshines the possible growth. In my opinion, Twitter could easily be valued at $25 billion but if too many investors are fueled by hopium- it could bring a similar result for impatient investors that couldn’t wait a year.  Facebook went public May 2012 and short sighted investors lost money.

Twitter Is Much Better Prepared for Mobile Than Facebook But…..

Twitter has a good mobile strategy but the efficacy of its ad serving platform is suspect.  Twitter users give little information about themselves to open up an account.  This means ads served on the platform are less relevant than those on Facebook where education, likes, connectivity to likeminded individuals, and other important variables make ads highly tailored.

Twitter has over 200 million users while Facebook boasts over 1.1 billion but Twitter isn’t necessarily a network of friends so it’s a bit more difficult to target with advertising.  My research shows the cost of the average Twitter follower is nearly 4 times as much as purchasing a “like” on a Facebook page.  The real issue is that my research shows a 1-20 efficacy-engagement rate.  In short 10 likes is worth 200 new followers for this sector. (A client paid for this- sorry I can’t share specifics.)

Early adopters will find this out sooner than later and tailor accordingly but GM definitely won’t sell cars based on tweets alone. Twitter campaigns may be less effective than Facebook but they could get fined tuned and remember- when Barack Obama won the Presidency in 2012 the first thing people saw was a tweet- not an update to his Facebook page.  Twitter is definitely onto something and betting against them seems like a bad endeavor after scrutinizing a recent chart of Facebook’s stock price.—–Oh yes….follow me @celestichukumba.

facebook six month chart technical analysis ended september 16 2013

 

Patient investors have made money off of Facebook after a ‘fuzzy’ initial public offering.  Facebook part 2 wouldn’t be so bad after all……

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