Ernst and Young has a study about IPOs called
Top 10 IPO readiness challenges
A Measures that matterSM global study
in which they state that:
Successful companies usually begin to act like a public company at least a full year prior to going public.
Do you believe that Twitter has been acting like a public company for at least a year?
( Link to Top 10 IPO readiness challenges: A Measures that matterSM global study executive summary - http://www.ey.com/Publication/vwLUAssets/Top_10_IPO_readiness_challenges_10/$FILE/2_Top%2010%20IPO%20readiness%20challenges%20a%20Measures%20that%20Matter%20study.pdf )
There are many naysayers claiming that Twitter’s IPO will only put more pressure on them to increase revenues, forcing the media company to place more ads, thereby hurting the quality of their service. This point is lost on me. Once twitter gets the capital influx from
The sky is the limit for Twitter.
their IPO, they will have every resource available to them to improve the quality and placement of the ads.
If anything, right now ad placement is hurting the service, due to the limited amount of advertisers they have. When I was searching for “#IPO #Twitter” the other day on twitter, I was repeatedly getting ads for a Chase service. While Chase is a financial institution and I was looking up a topic related to finance, this is not an ideal result. Something related to investing or financial news would be more appropriate.
But these are only my musings. The more experience Twitter gets with the ad placement, the more data they will have and the more valid will be their ad placement. Their revenue will just climb as their algorithms improve the ad targeting and as they find new means for advertising. In other words, Twitter’s value will continue improving for quite some time to come and the IPO will only give them the necessary capital boost to grow faster.
What about Facebook, you say. Yes, Facebook failed at their IPO, but as you can see their stock has rebounded (quite quickly, I might add) and will no doubt continue to grow as they add more revenue streams. Twitter will undoubtedly learn from its big brother’s mistakes, which is yet another plus for their revenue potential.