Tweet Tweet. A little birdie tells us Twitter is set to go public next year. And, according to a financial research firm the social networking site could be worth a staggering £7billion.
Greencrest, which is a firm of specialist financial researchers from New York, believes Twitter is gearing up to go public next year.
And, apparently it could be worth a pretty penny. Greencrest has come up with what it believes is an accurate valuation after looking at trading in secondary markets, which is where shares are privately traded.
Max Wolff, one of Greencrest’s analysts, says Twitter’s value has gone up since its rival Facebook went public last year.
While competitors have seen their shares go down since their Initial Public Offerings (IPOs), with Facebook shares falling by 26 per cent and games maker Zynga suffering a drop in value of 75 per cent, Twitter’s fortunes seem to have been more mixed.
In 2011, Twitter was valued at £8billion, then £10billion and back down to £9billion. But jWolff says Twitter’s potential value is being kept buoyant because of recent speculation that Californian tech giant Apple is looking at buying the company.
“Twitter is up since the Facebook IPO and is now valued at northward of $11billion,” he said. “This makes sense as growth in users and new monetisation efforts are both yielding fruit and pointing toward a good 2013 for Twitter.”
He said recent managerial shifts had also helped to shore up Twitter’s value, pointing to Ali Rowghani’s switch from chief financial officer to chief operating officer, with ex-Zynga employee Mike Gupta coming in in his previous role. Mike Davidson from Newsvine has also joined the board as vice president of design.
Late last year Twitter chairman Jack Dorsey, who has been romantically linked to flame-haired model Lily Cole, with whom he is currently on holiday, said: “You can think of an IPO as an exit or a goal, or you can think of it as more of a milestone. For us, it’s a milestone.”
Rumours had been doing the rounds that Twitter was expected to float in 2013, but its bosses are thought to have been put off making a move too soon due to the disappointing performances suffered by Facebook and Zynga.
Despite high-profile flotations, both companies have hit a bit of a brick wall when it comes to convincing investors of their worth. Facebook needs to prove it can make enough money and is on top of the increasing shift to mobile while Zynga was struggling to show it was capable of producing the right quantity of hit games.
And, indeed, the main focus of discussion following the news of Twitter’s value was how the company can go forward and make money.
One tech forum post said: “Surely it makes even less money than Facebook at the time. I have used Twitter a bit for over a year, and cannot see how anyone has made any money off me.”
And, as one forum user points out: “It’s only worth what someone will pay for it!”