When Twitter sent out its tweet announcing its IPO, a lot of questions came to mind about the next big thing in the IPO industry. One question was about the proper valuation of the firm, would it be USD10 billion or USD100 billion? Another one was, what was the future of the microblogging site?
On the other side of the fence would be, is it another overvalued flash in the pan that would eventually be placed in the repositories of IPO flameouts such as Groupon? Or will it grow to become a cornerstone in industry like Google?
According to ConvergEx Chief Marketing Strategist, a user base of 200 million and increasing with a by per user ad spending worth USD7 at margins between 30% to 40% would bring the value of the company's ad revenues at USD3.1 billion for 2015. Overall. Twitter is worth, using that simple computation, at USD11.1 billion.
Despite the lofty valuations, there are still many issues that Twitter either answers now or needs to answer for its future. Aside from the valuation, questions as to the internal structure need to be addressed, if they were strong enough to manage the future exponential growth.
To keep tweeting its success, there is a need for Twitter to grow organically, expand business lines and garner interest as a takeover target to grow in the long run.
Join the Conversation