Twitter more than doubled its third-quarter revenue to $168.6 million, but net losses widened to $64.6 million in the September quarter, it disclosed in a filing to Security’s Exchange Commission earlier this month. The statement is enough to justify Twitter’s move for IPO, feels Sachin Karpe who has been observing the Twitter IPO process closely.
The micro-blogging site which is likely to launch its IPO on November 6, has decided to sell 70 million shares at the price between USD17 and USD20 a piece. This puts the valuation of the company at USD 11 million, observes Sachin Karpe.
The business model is heavily dependent on advertisements which may not be profitable for a very long time, feel a lot of traders and analysts at the street who are acquainted with Sachin Karpe.
Few other say that Twitter has less-engaged audiences as it portrays. They currently do not have a very clear plan to monetize it. Its advertising is expensive as against facebook. These reasons may have caused analysts to no recommend the stock to their clients.
However, Twitter is in the phase of expansion. The company has been on a hiring spree and continuously working towards research and developments and data centers.
Sachin Karpe is of the opinion that the stocks must be bought post-IPO when the price undergoes correction. That is the best time to evaluate the share price. The best is to wait and watch.
Related articles
- NYSE holds ‘successful’ dry run for Twitter IPO (news.yahoo.com)
- Twitter sets IPO per-share price range at $17-$20 (bagladyboutiqe.wordpress.com)
- Twitter IPO pricing: $17-20/share, $1.4 billion total value (venturebeat.com)
- Twitter plans to raise $1.4bn in IPO (bbc.co.uk)
- NYSE does trial run of Twitter IPO (rev2.org)
- Wall Street Orders a Stress Tests for Twitters IPO (harleypyrate02.wordpress.com)
- Twitter prices IPO at $17 to $20 a share (reuters.com)
- Twitter said to be very close to pricing IPO (buzzom.com)
Sachin Karpe - Thoughts 