Technology

Tuesday 29 July 2014

Twitter 'worth $11bn, likely to float in 2014'

Katherine Rushton

Published 03/01/2013|18:54

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TWITTER is now worth around $11bn (€8.4bn), and is likely to make its market debut next year, analysts at Greencrest have claimed.

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Twitter was valued at $8bn at its last funding round in 2011 but saw the growth in its valuation slow after the dismal flotations of Facebook and games company Zynga dented confidence in technology businesses.









The social network, which allows people to share messages 140-characters long, has long been tipped for an initial public offering, but was thought to have gone cold on the idea after the disastrous market debuts of some of its Silicon Valley peers.



However, Max Wolff at Greencrest said the company had started firming up its management team and was likely to start preparations for the hotly-anticipated IPO towards the end of this year.



The micro-blogging network is worth around $11bn based on trading of unofficial shares in the company on the secondary markets, he added.



Twitter was valued at $8bn at its last funding round in 2011 but saw the growth in its valuation slow after the dismal flotations of Facebook and games company Zynga dented confidence in technology businesses.



Facebook has lost more than a quarter of its value since its IPO last May, while Zynga’s shares have plummeted by three quarters.

Greenstone was one of the analysis firms which massively over-hyped the value of those companies, but was careful to strike a note of caution with Twitter.



“Using the secondary market for shares to mark enterprise value is a very difficult and opaque process. It is a rumor rich and special share class soup,” said Mr Wolff.



“That said, Twitter is up since the Facebook IPO and is now valued at northward of $11bn. This makes sense as growth in users and new monetisation efforts are both yielding fruit and pointing toward a good 2013 for Twitter.”



Twitter has seen its user base grow rapidly over the last few years, but it has historically struggled to translate that into profits. However, it has become more aggressive in its efforts over the last 12 months.



Twitter's co-founder Jack Dorsey has said in the past that the company would go public when it is "ready for that milestone", rather than as an exit plan or goal in itself.

Telegraph.co.uk

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