Twitter’s IPO Left Money On The Table, Still A Success

Twitter's IPO Left Money On The Table, But It Was Still A Success

Twitter’s IPO has been off to an incredibly good start. While many people feared the company would suffer the same mistakes made by Facebook when going public, the company has managed to sidestep the pitfalls and woo investors.

The New York Stock Exchange was buzzing with excitement during Twitter’s high profile initial public offering. There was no shortage of reminders what this day meant for the company: Twitter birds and the Twitter logo graced the inside and outside of the building; nearly every trader on the floor was there for one reason, and one reason only: Twitter.

Surprisingly, Sir Patrick Stewart was in attendance, taking center stage on the podium. Of the company executives that were in attendance — co-founders Jack Dorsey, Evan Williams, Biz Stone, and CEO Dick Costolo and CFO Mike Gupta, chose to make their appearance on the exchange floor.

It was an exciting time for all; the floor was packed with members of the media, bankers, traders, and guests. Silence feel upon the floor before the opening bell as everyone awaited an opening price for TWTR. Over an hour was spent waiting on the number to be dropped, but when it finally did, the stock opened at $45.10 — a whopping 73% higher than the stock’s IPO price.

The company had hoped to raise $1 billion in its IPO, which ended up bringing in a little under $2 billion dollars. Still, many believe that Twitter left money on the table — a whole lot of it. The IPO was underpriced, which is good for investors and the underwriters of the offering, but going public means pulling in needed funds for expansion and operating costs. Nearly $1.25 billion was missed out on, experts say.

All in all seventy million shares were sold at $26 apiece. Those same shares could have fetched as high as forty-five dollars.

And Twitter needs revenue. Twitter is a zero profit company that is valued at $31 billion. To be fair, the company is still in its infancy; the first tweet was sent on March 21, 2006. There is still plenty of time for it to grow into its new valuation. Twitter has a lot going for it: mobile, users, promising advertising revenue potential. It just needs to work out the kinks and find the balance between profitability in advertising and not alienating users.

What do you think is next for Twitter?

Connecting the dots between technology and trends, Anthony Miller aka "Tony" focuses on staying at the forefront of disruptive tech. Follow on Google+.

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