Later this year, Twitter stocks with its Public Offering (IPO) are expected to draw its initial comparisons with that of its rival social networking site Facebook, which saw most of its share price falling soon after the floatation and prior to the later rallying and is presently trading above its IPO price. Such outcome is very much comparable with that of Twitter, however the longer-term prospects for the intended stocks are pretty much looking good so far.
There is always the added risk with social media platform that could possibly go out of trend, but many analysts think that it is less likely that it would happen with Twitter. What separates Twitter from the rest is that its simplicity which is very enticing to both individuals and businesses alike.
In terms of its profit generation, there has been a substantial increase in the volume of advertising and sponsored tweets lately which simply imply that the businesses are now only beginning to recognise the vast potential Twitter has as an advertising tool to promote personal and multilevel businesses.
Another concern which investors are contemplating is that Twitter, which already has more than 554 million active users, may have reached a point of saturation and that those numbers are not going down but basically keeps adding up every year for that matter. Moreover, we should always consider the fact that Twitter is generating a combined revenue of $500 million (£313 million) each year which is pretty much a stable and healthy sign of growth and stability.
From an investors point of view, the initial estimates on the valuations of the company that created the social networking site is that the price in revenues of $1billion instead of actual revenues of that estimated number shows volatility when stock enters the market. However, that will just be the market assigning the price of the asset. Over the longer term, there is a high potential for a continual strong growth in the future.
IG is currently running a “grey market” on Twitter IPO, in which a bulk of its customers can already bet on the anticipated float price of the stock. Furthermore, there has been considerable optimism and enthusiasm regarding the prospects for Twitter along with expectations that the company could be valued with an estimated worth of $13 billion.