Wednesday, November 6, 2013

So Twitter Walks Into A Bar...

...And there stands Apple, Facebook and Google.  If the bar stays open for ten years, who will be left bellying up?

That's the question a lot of stock market investors are pondering right now.  Twitter's IPO is set to launch tomorrow.  Round and round it goes, what its valuation ultimately will be, nobody knows.  A case can be made that it is valued much higher than Facebook was at the same time in its history.  And it sure seems that Twitter is trying to do everything that it can to avoid the mistakes that Facebook made during its IPO, i.e. using different bankers and choosing an alternative listed exchange on which to trade.

Perhaps they're focused on the 50% drop in Facebook shares that occurred just three months after going public.  And Facebook was growing at the time--by any measure,  new Twitter users are stagnant at best.  How many of your parents' friends have been newly tweeting?

Most likely the people most nervous about the listing tomorrow are huddled in meetings at the New York Stock Exchange.  A PR nightmare will ensue if they don't pitch a perfect game.  Their reputation and credibility are on the line.

Twitter is a good idea.  It is informative, thought provoking, and fun.  However, not all good ideas are good businesses.  Iridium and Webvan come to mind.  Will today's first graders know what Twitter is when they graduate from high school?  Tough to say.

Just in case, when you place your buy order with your broker for Twitter tomorrow, ask to have the physical shares sent to you.  That way, at least, you'll have the ability to offer them as collectibles on Ebay if and when the time comes.