With Facebook on Wall Street and about to come to the end of its first official year of trading, everyone in the tech world is curious about when Twitter will file its initial public offering (IPO).
There is has been much speculation around the microblogging’s site IPO set for 2014. According to Greencrest Capital, a research firm for soon-to-IPO businesses, a project valuation for Twitter can be established using its performance in the secondary markets.
“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,” says Greencrest’s Max Wolff (as quoted in Forbes). “That said, Twitter is up since the Facebook IPO and is now valued at northward of US$11-billion. This makes sense as growth in users and new monetization efforts are both yielding fruit and pointing toward a good 2013 for Twitter.”
Twitter’s road to an IPO will probably be as watched and speculated about as Facebook’s was. Another report from a financial research firm, PrivCo, speculates that Twitter will learn from Facebook’s mistakes.
“Twitter will learn from Facebook’s flawed playbook and do the opposite. Twitter will conservatively price its IPO at 30 times revenue, or $15 billion,” PrivCo CEO Sam Hamadeh said.
According to the firm, Twitter’s revenue is expected increase significantly from US$87.5-million to US$245-million at the end of this financial year.
“Unlike Facebook, which waited too long to IPO (until its growth rate decelerated), Twitter will IPO at just the right inflection point: while revenue grows in triple digits and with its final pre-IPO quarter reported at its seasonally strongest fourth quarter,” Hamadeh added.
In preparation for the upcoming IPO it seems Twitter is hoping to boost its user numbers in international waters, reports Businessweek. The company hopes to do this by providing its international users with more affordable options when using the service.
“We need to deliver a more compelling product for low-end devices,” Dick Costolo, Twitter’s chief executive officer, said in an e-mail.
According to the Businessweek report, the company is attempting to sign deals with mobile carriers in Asia, South America and the Middle East, where feature phones are more prominent. Twitter has partnered with more than 200 operators in more than 100 countries, including India, Pakistan, Mexico, Brazil, and the Philippines. Some of these deals allow users to read and post tweets without for free while others just waive text-messaging charges.
“By developing simpler versions of its application and landing deals with mobile carriers and device makers, Twitter is making its service cheaper and easier to use,” says Businessweek.
One such deal has already taken place in Turkey and saw Twitter and Turkish pop sensation Murat Boz gain overnight attention.