Thursday 12 December 2019

TH€ PUNT: All a-Twitter over valuation

THE company that suggests Twitter is worth as much as $11bn (€9bn) and could float on a public market next year, is one of the most credible in the industry, but that still may not be enough for investors to view the microblogging site as anything other than overvalued for now.

Greencrest Capital specialises in looking at companies before they IPO, and its analysis of Facebook when it was a private company has proved to be among the more accurate research that was done on the company at the time.

Even so, there can be little doubt that Twitter has been harmed by the perceived failure of Facebook's flotation as well as the collapsing share prices of the likes of Zynga and Groupon.

If Facebook's deal in particular had gone according to plan, it is likely Twitter would be seeking a flotation this year.

Those plans are have now been put back.

It is important, however, that the plans have been delayed, rather than dropped. Twitter is the next great technology IPO coming down the line that is likely to see thousands of users, who are also unsophisticated investors, part with their hard-earned cash for shares.

For their sake, let's hope the company gets its valuation right.

Now Irish builders doing so much . . . in Scotland

The Punt recalls a speech Scotland's current First Minister Alex Salmond gave a number of years ago as Ireland's boom raged.

Addressing party colleagues, he said: "The difference between Scotland and Ireland is that Ireland has done so much with so little, while Scotland has done so little with so much."

Stirring words indeed.

But now the Irish construction firms faced with a work drought on their own turf have angered the head of the Inverness Chamber of Commerce, Stewart Nicol.

He has claimed that major construction projects in the Highlands are being awarded to Irish companies at the expense of local firms.

Mr Nicol has told a local newspaper that Irish companies are putting little into the Highland economy because they're bringing over their own staff and haven't been hiring plant and equipment locally.

"Their guys are staying in Portakabins, there is not even money going into local bed and breakfasts," said Mr Nicol.

But all's fair in love and war, they say.

Perhaps Alex Salmond, who's leading the crusade for Scottish independence in the 2014 referendum, will have more leeway to address procurement legislation if that vote goes the way he wants it to.

Dark cloud over PMI cheer

There was more good news for the economy with the NCB Services PMI showing growth for the fifth month in a row in December.

At 55.8 the index was down slightly on November but still well above 50, which dictates whether the sector is growing or shrinking.

Like the manufacturing PMI from Wednesday, Ireland bucked the wider European trend.

The eurozone services PMI was unchanged at 47.8, but the big problem was Britain, which saw its services sector plunge to its worst reading since April 2009.

The UK measure is a curious one, as it includes the City, as well as the London-based media sector, much of which is exported overseas.

Unfortunately, the unexpected contraction means Britain is probably heading for a triple-dip recession.

As Ireland's major trading partner, this would be incredibly bad news for us and is something that we can only hope is avoided.

Irish Independent

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