The Stock 140: Twitter Goes Public

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Ever since Facebook made its IPO investors have looked askance at social media-based stocks. This is hardly surprising considering the rapid plunge in value they experienced. Zacks notes the details:

[A]fter going public in May 2012, Facebook slipped below its IPO price on the second trading session and began sliding more than 18% in just three trading days and nearly 27% in the month of listing.

This is because the pricing issue marred the company’s transition to being public. Facebook had overpriced its valuation to $100 billion prior to the IPO while its actual valuation was $60–$75 billion.

Numbers like that can, and did, make investors head for the hills. No one wants to put money into a losing proposition.

That high-profile debacle tarnished social media stocks on Wall Street, producing a public perception of them as ephemeral, overpriced, and underperforming. Now, in the last quarter of 2013, that trend seems to be changing and Twitter is preparing to dip its toes in the IPO pool.

What sort of reaction will Twitter stocks receive? PC World interviewed someone who thinks it will be a good one:

‘This is a great move for Twitter,’ Brian Blau said Thursday of Twitter’s announcement via tweet that it had confidentially filed plans for an initial public offering.

‘It’s Twitter growing up, coming of age, maturing […] all those things,’ said Blau, an analyst with Gartner who focuses on consumer technology and social media.

‘This gives it a sustainable future,’ he added.

While social media stocks are not anathema like they were in the days before Facebook rebounded, they are still far from a sure thing. Since going public, LinkedIn has become one of the hottest properties on Wall Street. Groupon, on the other hand, has done nothing but lose value since it hit the market in 2011. Groupon stocks actually performed so poorly that the company got rid of its founder and CEO Andrew Mason. Since then it has made somewhat of a rebound.

So here we go, the next big tech IPO. What do you think? Will Twitter’s unique microblogging format allow it to endure after going public? Will it come to be viewed as “too corporate” and lose its cache once profit becomes a priority? Let us know what you think in the comments!

Oh, one more thing! Would you buy Twitter stock at the IPO? We would love to know!

About George Williams

George “Loki” Williams is the community and brand manager for award wining game company Savage Mojo, Ltd. and the owner of SocialGumbo, LLC, an online consultancy specializing in Web content and online communications. Loki has produced content for clients including the Open Society Institute, National Association of Broadcasters, Kobold Press, and Kaiser Permanente. His work has been seen or written about in The New York Times, The BBC, Air America, The Gambit Weekly, and NOLA.com, among others.

  

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