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Wednesday 24 September 2014

Twitter valued at $11bn ahead of possible 2014 stock flotation

Peter Flanagan New Technology Correspondent

Published 05/01/2013 | 05:00

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TWITTER is worth as much as $11bn (€8bn) now and could be floated on the stock market next year.

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That's the verdict of US firm Greencrest Capital after running its rule over the micro-blogging site.

Twitter has long been targeted as the next big initial public offering (IPO) to come from the technology world.

Market-watchers had speculated that the IPO could have happened in 2012, but when Facebook's flotation met with lukewarm demand potential investors in Twitter are believed to have backed off until the market eases.

After it closed a round of financing in 2011 the company was worth around $8bn and increased to about $10bn, ahead of the Facebook IPO. It fell back to close to $9bn after the problems Facebook experienced, but Greencrest say it has now bounced back.

"Using the secondary market for shares to mark enterprise value is a very difficult and opaque process," said Greencrest analyst Max Wolff.

"It is a rumour rich and special share class soup. 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," he added.

Twitter has only recently begun to aggressively monetise its users, with promoted posts and other advertising methods becoming more common on the site.

It made a bid of more than $500m for the photo-sharing site Instagram, which was eventually bought by Facebook. Twitter has since blocked images from Instagram opening directly on its platform.

Twitter's valuation is considered much more realistic than Facebook's, which swelled to more than $100bn in the run up to its IPO. Still, there are indications that even at "only" $11bn, the micro-blogging site may be overvalued.

There has been repeated speculation that Apple may try to buy the company, and that may have been priced into the business as it is.

Irish Independent

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