Twitter Goes Public, Now What?

November 9th, 2013 at 2:50 am
 


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The Twitter IPO has finally pushed through after months and months of speculation. The way it is going, analysts are saying that it is faring better than when social network Facebook’s IPO of last year. The social network experienced a sudden decline in its share price in the weeks following the IPO. It took about a year for Facebook to reach share prices at IPO levels. So far, Twitter is not experiencing the same thing.

The Twitter IPO also did not go through the numerous glitches that plagued the social network giant. Share prices so far has increased considerably, about 70 percent than its IPO share price. This indicates that Twitter still may be garnering some interest among the investors. But there are still challenges ahead for the popular micro-blogging site.

Despite the successful IPO, Twitter may still have to find a way towards profitability, now that it has shareholders to consider. The company is still losing money despite being a popular social platform that has over 232 million users worldwide. Since being launched in 2006, Twitter has yet to post a year that it is not operating on the red. Some investors may be patient with the company for now. However, if the loses stretches for several more years, the company should expect many to abandon ship and see share prices dip. But expect to see an upward streak if Twitter finds a solid revenue model that will allow it to earn profits for its shareholders.

Not that Twitter has gone public, control over the company may now change. The company may be open more than ever to address the needs of the public. As a privately held company, Twitter founders and management have better control over the reins and steer Twitter to where they want to go. But that will somehow change as shareholder sentiment may now begin to influence company decisions.

So far, the outlook for Twitter remains rosy despite its poor financial performance. The site has been showing promising mobile statistics, with management expecting a year of profitability by 2015. Shareholders are holding on to that expectation that the company will stand by its promise. We will know in a year or two if that will hold true.

 

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