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Financial World Is All a-Twitter.

Twitter new-twitter-logoannounced its IPO, but it’s doing so in a “double secret” way, so we won’t have their full financial info for a while. It’s doing what is called a Confidential IPO which is kosher for a smaller business, though Twitter is hardly small. Basically they can hold back exposing their financial data until shortly before the financial road show, and in so doing, can avoid the stigma if they decide to retreat from going public, though it’s unlikely they won’t proceed. Basically it gives Twitter less financial exposure and less historical financial info they need to provide (2 years vs. 3 years). I’m not a financial maven on SEC IPO rules, but this is a new and legit way for smaller businesses (under $1 Billion) to operate.

The $64,000 question is whether going public is a good thing for Twitter and a sound investment. Once again I am not a financial advisor (nor do I play one on TV, nor have I gone to a Holiday Inn Express lately) but I think Twitter’s future is very rosy. Twitter gets it. It has a platform worthy of investment and a business plan that makes sense.

First of all it’s important to not view Twitter through the Facebook prism. Twitter is not the mega-force that Facebook is, and their IPO will be more “LinkedIn-like” than Facebook. Though Facebook has now worked through the issues of its IPO and the early decline of its stock price and it now trades modestly above its opening price, its IPO was a mega disaster. Even Mark Zuckerberg when asked about Twitter’s IPO said, “I’m the last person you’d want to ask about how to make a smooth IPO”. Twitter, in not being quite as high profile, may not suffer the mega hype of Facebook’s IPO.

Some important Twitter factoids. There are now 200Million Twitter users. Obviously again Facebook with its 1 Billion+ users dwarfs Twitter, but 200Million is not chopped liver. Twitter annual revenue is now $583Million with expected revenue of nearly $1Billion in 2014 and $1.33Billion in 2015. What makes Twitter strong is that unlike Facebook which needed to “figure out” mobile, Twitter has always thought and acted as a mobile-first platform, and the majority of its ad revenue is already derived from mobile ad revenue. In fact there are those who believe Twitter is beating Facebook in mobile marketing.

I had the opportunity to hear Adam Bain, Twitter President of Global Revenue, last year at a business event on the West Coast. I came away being impressed with him as a businessman and Twitter as an ad vehicle, not merely just a cool way to communicate to others in 140 characters or less (it is cool—I love Twitter). Feel free to follow me and I will do likewise.

The demos of the twitter user are impressive as well. With 18% penetration of adults, twitter skews young/urban/affluent which bodes well for continued growth. Facebook is a behemoth , and yet for all of its omnipresence, is more “mature” and hence more at risk to become yesterday’s news (don’t worry Facebook you still have a fine business).

It’ll be fun to see how Twitter evolves and how the market reacts. My 2 cents is that its IPO will be a big success, and my 2 cents could soon turn into a nickle. We’ll see.




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