Twitter valued at $11bn as it begins preparation for a possible 2014 IPO
After a rocky 2012 for technology companies coming to the market, which left Groupon, Zynga and Facebook bruised, no one wants to rush towards an IPO in 2013 and particularly not Twitter, which finished the year strong after its role in the US presidential election.
When it does make the leap it could well be, as some have put it, the IPO of the decade. It is currently valued between $8bn and $11bn and could easily accelerate beyond that figure if 2013 continues in the same vein as 2012 and it continues to follow the revenue trail and build its social advertising business on the web and crucially in the mobile space.
The 2014 date is by no means certain. The latest mention comes in a report by Greencrest Capital, which studies companies that are probable IPO candidates, and it suggests Twitter’s preparations for a public debut may begin this year giving it 12 months to build and the economy to improve before an offering in 2014.
According to Greencrest Capital breadcrumbs suggesting that a Twitter IPO might come in 2014 include recent personnel moves such as Ali Rowghani’s appointment as chief operating officer — a key position in any IPO. Rowghani was previously chief financial officer having joined from Pixar Animation Studios where he was CFO and senior VP of strategic planning.
Add to that the hiring at the end of 2012 of Zynga’s treasurer Mike Gupta. He joined Twitter, with his IPO background at the social games company, to take on the CFO role vacated by Rowghani. He was at Yahoo prior to that.
The key question, other than the date itself, is the valuation. What is Twitter the all conquering social media stream worth?
Previously Twitter had been valued as high as $1obn. After Facebook came to market that figure was revised down to around $8bn, but it has been creeping up again and Max Wolff, senior analyst and chief economist, at Greencrest says now the figure could be as high as $11bn.
“Using the secondary market for shares to mark enterprise value is a very difficult and opaque process. It is a rumour rich.
“That said, Twitter is up since the Facebook IPO and is now valued at northward of $11B. This makes sense as growth in users and new monetization efforts are both yielding fruit and pointing toward a good 2013 for Twitter,” Wolff told Forbes.
That piece, a backgrounder on Twitter CEO Dick Costolo, also suggested a possible IPO date of 2014 giving it time to develop revenues and for the markets to put thoughts about the problems surrounding Facebook and Zynga’s disappointing IPO’s behind them.
“Its next big step is to go public on the stock market, and insiders say the current goal is to have an initial public offering in 2014. Twitter’s social media twin, Facebook, has already gone public, of course — and, so far, Facebook stockholders have lost billions, at least on paper. Facebook’s troubled I.P.O. hangs over the technology industry as a cautionary tale of how investors can become star-struck.
“Mr. Costolo didn’t found Twitter. Jack Dorsey, Christopher Stone and Evan Williams did. But today Mr. Costolo is essentially running the business alone, and friends and colleagues say he is eager to build the company,” the New York Times reports.
What else can we expect in 2013 from Twitter? One thing that is going to be interesting to watch is how its new new photo filters perform particularly as Instagram, offering a helping hand, stumbles after it sparked user anger with changes to its terms and services.
Facebook-owned Instagram is reported to have lost as many as 25% of its daily active users since people expressed their displeasure over the terms of service change, according to tracking from AppData.
We can also expect to see another spurt of growth in the number of brands using its Promoted Products in 2013, which it worked to improve last year with new targeting capabilities and news of impressive performance in how Promoted Tweets were performing on mobile — achieving more than 40% in terms of engagement.
You can see how some what some brands tried on Twitter in with Twitter’s Top Ten List of Promoted Product campaigns for 2012.