Twitter valued at $11 bn as it prepares for IPO in 2014
04 Jan 2013
Twitter is gearing up for going public in 2014, and according to a research by specialist financial researchers Greencrest, the mini blogging site could already be worth around $11 billion.
The rough valuation of $11 billion is based on trading in secondary markets, where unofficial share transactions happen privately. However, according to a funding round, Twitter was valued at $8 billion, after which the value rose to $10 billion on secondary markets before Facebook's IPO fiasco pushed the value back down to $9 billion.
According to Greencrest analyst Max Wolff, Twitter's value had also risen on speculation that Apple was interested in acquiring the company. He added, using the secondary market for shares to mark enterprise value was a very difficult and opaque process.
Twitter had been widely speculated to go in for an IPO this year year, but would hardly have taken encouragement from the high-profile, disappointing performances of both Facebook and Zynga. Both had struggled to convince investors that in Facebook's case, the business was ready to make money with consumers shifting to mobile, and in Zynga's case that they were capable of producing enough hit games. Facebook's shares were down 26 per cent following the IPO, while Zynga's value had dropped by 75 per cent.
Twitter management has hardly been forthcoming about when a listing would take place but has said it would take Twitter public when it was ready.
Twitter users numbered around 500 million last year, and a good day sees around 175 million new posts.
According to company projections for the year, Twitter would raise around $400 million from advertising, up from $259 million in 2012.
The potential listing would also work to the benefit of Tweetdeck founder and British entrepreneur, Iain Dodsworth who was bought out by Twitter in 2011 for £25 million in cash and shares.
However, analysts say Twitter's listing was in doubt following the troubles with Facebook's $104 billion IPO in May last year. Post the listing of shares of the world's biggest social networking site, its shares have slid from $38 a share to just under $28 today.