Twitter (TWTR) Soars On First Day of Trading, Leaves at Least $1 Billion on The Table

Twitter’s (TWTR) Market Cap At $24 Billion Following First Day Publicly Traded

After pricing their IPO at $26, shares of Twitter (TWTR) opened at $45.10 and briefly topped $50 before closing the day at $44.90, giving the company a $24 billion market cap. While most have praised Twitter and the handling of their IPO, I believe management really dropped the ball here. As has been widely reported Twitter loses money and has been investing in growth heavily, so they need as much cash as possible. They failed to raise anywhere near the amount of money they should have by significantly under-pricing their IPO at $26, seemingly giving more consideration to Facebook’s (FB) IPO debacle than to their own balance sheet. Had they priced their offering at even $40 per share, 12% less than what the market ended up valuing them at, Twitter would have added an extra $1 billion to the company’s coffers to fuel future growth. Twitter as a product is great, their social video network Vine is also loved by many with over 40 million users less than a year since launching. TWTR has a great deal of potential to monetize these platforms down the road, but management must be much more prudent in handling their finances moving forward or investors will suffer.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.

Twitter (TWTR) Files for IPO, Seeks to Raise $1 Billion

Twitter (TWTR): Files For $1 Billion IPO

Long anticipated, Twitter has filed their S-1 Statement with the SEC, moving forward with their plans for an IPO this year. Twitter will list under the symbol TWTR. A few key notes from the S-1 Statement

  • Twitter had 218 million monthly active users as of 6/30/2013, an increase of 44% year over year. Of the 218 million, 169 million are international users.
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  • Twitter’s 218 million active users tweet over 500 million tweets per day.
  • Revenue for the first 6 months of 2013 of $253.6 million, an increase of 107% over the first half of 2012.
  • Twitter generates 65% of their advertising revenue from mobile devices.
  • Net loss for the first half of 2013 was $69.3 million, an increase of 41% year over year.
  • Adjusted EBITDA increased from $0.7 million for the first 6 months of 2012, to $21.4 million in the same period this year.
  • Twitter is using “Timeline Views” rather than pageviews to measure their ability to monetize their platform. Twitter defines timeline views as the total number of timelines requested when registered users visit Twitter, refresh a timeline or view search results while logged in on our website, mobile website or desktop or mobile applications.
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  • Twitter defines advertising revenue per timeline view as advertising revenue per 1,000 timeline views during the applicable period. In the three months ended June 30, 2013, Twitter’s advertising revenue per timeline view was $0.80, a 26% increase YOY. In the three months ended June 30, 2013, TWTR’s advertising revenue per timeline view in the US was $2.17 and $0.30 in the rest of the world, increases of 26% and 111% from the three months ended June 30, 2012, respectively.
  • Twitter has raised $759.2MM in Series A thru G convertible preferred stock rounds

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.

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