The Curran Account: This bird can fly: Markets back Twitter to keep rising
YOU have to hand it to the management team and co-founders of Twitter. Last week’s stock market flotation could not have gone any better.
Initially, they decided to price the float at $17 (€13) to $20 per share. This was an attractive discount to the likes of Facebook. But heavy demand prompted them to push it to $20, then $25. It debuted on the market at $26, valuing the profitless company at over $14bn. The huge share price surge on the first day to $43 valued the business at a premium to Facebook and Linkedin, and a market value of $25bn.
Twitter has built up a global brand, with hundreds of millions of followers, who like to use it for free, and a revenue model based primarily on advertising. Its revenues are growing at a rapid rate, but were still only $600m.