IPOs, Initial Public Offerings: pre & post IPO

Twitter, preliminary IPO valuation

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Observations

  • Twitter has a higher sales growth rate than either Linkedin (LNKD) or Facebook. (FB)
  • LNKD & FGB both have stable gross margins
  • Twitter has lower gross margin but it is increasing

Conclusion

  •  At a $13 billion market valuation Twitter should be a buy on the IPO.
  • However, Twitter does have an issue with a declining rate of growth in number of users.

 

 

Mrk cap

 

Rev Growth

June 6 mos

 

Gross margin

GM % chg June 6 mos

 

($mm)

 

Rate*

annualized Price-to-sales

 

June '13 6 mos

vs 2012

Twitter

$13,000

 

60%

26

 

64%

+5%

Linkedin

$27,470

 

42%

20

 

87%

+0%

Facebook

$120,000

 

29%

18

 

73%

+0%

 

 

 

*annualized June 6 mos '13 vs 2012yr

 

 

 

 

 

 

 

 

 

 

THIS IS AN ISSUE FOR TWITTER, declining growth rate in # of users

 

 

 

MAU (monthly active users)

 

 

 

 

 

 

 

March '12

June '12

Sept '12

Dec 12

March 13

June '13

 

 

138

161

167

185

204

215

 

% chg

 

17%

4%

11%

10%

5%

 

 

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