Tomahawk, WI 10/08/2013 (BasicsMedia) – So wait for much anticipated Twitter IPO is finally over. The company which revolutionized how people share information using just 160 characters is all set to raise a billion dollars from stock markets. Company has also finalized its ticker, which is supposed to be TWTR. But unlike Facebook, company is playing safe and is not flooding the markets with a very high number of shares. It is trying to restrict supply so that a high price may justify the demand.

Started in 2006, it has been a long and eventful journey for Twitter which has made Twitter celebrities on the way. For anyone who wishes to be famous, it is almost inevitable that he will have an active twitter handle. The Roman catholic Pope, the president of United States, Hollywood stars, you name them and you will find them here.

With its filing with regulators, Twitter for the first time has disclosed its financial numbers. Company in 2012, had generated revenues of $317 million with losses of 80 million dollars. As per company’s estimates and half year data for 2013, it is on its way to generate revenue in excess of $600 million. But important point to consider here is that it will once again be making losses this year. Though there is a lot of hype about Twitter’s IPO and how it will make money for the investors, the fact remains that company till date has failed to make money and has had accumulated losses of more than $400 million. So why is it that everyone so excited about Twitter’s IPO? The very first thing which comes to mind is the mindshare which twitter accounts for. Almost everyone knows about twitter. And after Facebook, this is the first high profile tech-IPO to hit the markets.

Analyst community seems to be divided over valuations of the company. But some have been brave enough and have come out with a Buy rating even before the stock of this loss making company has got listed. Sun Trust Robinson Humphrey has given a price target of around $30 for twitter’s share. The rating agency has also projected a price in excess of 50 dollars within next one year. To justify this high price, the agency sees a few possible options for Twitter to increase its revenue from TV ads, monetization of search, commercial sale of good and application installations. But it seems that the agency has forgotten that people use twitter to share information and not to search like they use Google for. Now this 50 dollar valuation, or rather speculation is in stark contrast to what another independent academic valuation expert, Prof. Aswath Damodaran has come out with. According to Aswath, at a price of $10, Twitter’s shares could be a bargain for serious investors. He also gives views on higher prices by saying that anything above $20 would mean a valuation which may not sustain for a very long time. The initial euphoria may take it even above it, but fundamentals of this loss making business would pull it down to somewhere closer to 10 dollar mark.

With twitter yet to come out with exact pricing, it remains to be seen how much demand the company’s initial stock offering would have. But from responses it is getting for its road shows, it seems that demand is sure to outstrip supply by miles.

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