Twitter's IPO to meet Wall Street appetite for web firms - Telegraph.co.uk

LinkedIn, the professional networking website which floated in 2011, recently tapped the demand by placing $1.2bn of new stock in a massively oversubscribed offering. The company is now valued at $28bn, trading on a price to earnings ratio north of 730. Such high numbers have prompted understandable talk a bubble around social media stocks, but there is no doubt the market will welcome Twitter with open arms, and open wallets. For those lucky enough to already own Twitter shares thanks to private investments or employee stock options, it will be a bonanza. They have already been trading shares in private sales that put a valuation of up to $16bn on the company. Largely because of Facebook's disastrously high initial public offering, Twitter might come to market below that level, with the expectation it will quickly surpass it. Without sight of Twitter's accounts, it is impossible to accurately peg any valuation against the state of its business. Third parties have published informed estimates based on analysis of the digital advertising market, however. According to eMarketer, Twitter's revenues this year will reach $583m, more than double last year's estimated total. The company says it is profitable and it has attracted $1bn in private funding over the years, so it's unlikely that its flotation is driven by financial necessity. Instead, the venture capitalists who power the Silicon Valley growth engine and have many failures, expect big returns when they have a rare hit such as Twitter on their hands. Having given Twitter six years since its first funding round, they most likely believe the time to cash out has come. What Twitter will do with the billions of dollars it will raise for itself may be overlooked in the gold rush. The company still needs to invest in its advertising sales operations, particularly outside the United States. Its $300m acquisition this week of MoPub, a mobile advertising company, meanwhile showed that Twitter is also in the market to buy technology to build and defend its business. For the nearly 300 million Twitter users around the world, its flotation will make little difference. The service has evolved over the years with new features such as the Vine video app, but the core remains short, speedy text. As a public company it may come under more pressure to exploit them with more advertising, as Facebook has, but it has hardly suffered as a result. via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNGevdCxTt-zhuPjxkFzBPJS2lw8gA&url=http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/digital-media/10306885/Twitters-IPO-to-meet-Wall-Street-appetite-for-web-firms.html

Put the internet to work for you. via Personal Recipe 2598265