Twitter’s highly coveted initial public offering — scheduled for Thursday — has been painted as the anti-ÂFacebook coming-out party, and with good reason: There are adults in the room.
The social medium chose Goldman Sachs as lead banker and opted for the NYSE as the exchange to list TWTR.
Twitter’s CEO, Dick Costolo, is keeping the roadshow very professional. There are no executives showing off their hoodies or high-tops, or any cheesy paparazzi following in tow, as there were with Facebook’s launch.
Twitter’s executive team is much more polished and much less peddling. Unlike Facebook, Twitter is shaping up as a very tough IPO to get into, because it is selling less of a stake.
Twitter, which was founded in 2006 by Noah Glass and then-NYU student Jack Dorsey, as well as Biz Stone and Evan Williams, has grown into one of the world’s most visited social-networking sites.
Twitter was created in 2006 in just four months. Health and Human Services Secretary Kathleen Sebelius must have some serious software envy.
Although it has yet to turn a profit, if, as expected, the IPO prices in the range of $17 to $20, Twitter will be valued at nearly $11 billion.
It is not uncommon for companies like this to move up the offering price in response to high demand. Several analysts and traders said they expect that when Twitter starts trading, value of the company will be close to $20 billion.
At $20 a share and with analysts projecting $640 million in revenues for 2013, Twitter would be priced at 17 times revenues.
That multiple is high by any standard — other than Silicon Valley’s.
So is Twitter worth $11 billion at its offering?
Well, if Facebook was worth $100 billion, Twitter’s valuation may make sense to many investors.
The genius of Twitter shows in how it taught us to communicate in 140 characters or less, when we never even knew we wanted to.
It’s tough to bet against it.