Thursday 23 November 2017

The Curran Account: This bird can fly: Markets back Twitter to keep rising

To boldly go: Star Trek actor Patrick Stewart, NYSE executive VP Scott Cutler, nine-year-old Vivienne Harr, and Cheryl Fiandaca, of the Boston Police Department, ring the NYSE opening bell as Twitter shares entered the market
To boldly go: Star Trek actor Patrick Stewart, NYSE executive VP Scott Cutler, nine-year-old Vivienne Harr, and Cheryl Fiandaca, of the Boston Police Department, ring the NYSE opening bell as Twitter shares entered the market
Richard Curran

Richard Curran

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.

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