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Published 14 Sep, 2013 06:59am

Twitter IPO will be hot but with risks

WASHINGTON, Sept 13: Twitter is leveraging its phenomenal growth for one of the hottest stock offerings in years, but questions remain on its ability to sustain its breakneck pace of expansion.

While financial details of the popular messaging platform are not public, the private company research firm PrivCo estimates that Twitter generated $245 million in revenue in 2012, and predicts the figure will be $500m in 2013.

This suggests a market value of some $15 billion for the initial public offering (IPO), PrivCo says, using a “conservative” pricing at 30 times its annual revenue.

“It’s not quite Facebook but it’s certainly the biggest thing since Facebook,” said Lou Kerner, founder of the Social Internet Fund, referring to the May 2012 IPO of the world's biggest social network.

“Social media is very hot, with Facebook hitting an all-time high, and investors are looking for other ways to play that,” Kerner told AFP.

Kerner said Twitter will be in high demand because “it is well on its way to becoming one of a small number of ubiquitous platforms used by a majority of people on the planet.”

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