Analysis: Why Twitter may well be worthy of a £6.8bn IPO valuation

By Peter Gothard
08 Jan 2013 View Comments

If Twitter went to IPO in 2014, it would be worth $11bn (£6.8bn). So say financial researchers at Greencrest Capital.

Further reading

While this speculative estimate might be little more than a post-Christmas 'what-if', it nonetheless opens an interesting window into the fortunes of the enduringly popular microblogging site when compared to the still-rocky progress of Facebook, which launched on the stock market in May 2012.

It's all about monetisation, of course. Greencrest partly bases its 2014 estimate on Twitter's recent hirings of ex-Zynga SVP of finance and treasurer, Mike Gupta, and Newsvine (sold to in 2007) founder Mike Davidson. The reading here is that such financially-minded personnel are working on helping Twitter find even more creative ways to fill the social media moneybox on a daily basis.

Facebook, in comparison, didn't seem to seriously consider monetisation until the IPO had already come and gone. Though launching "sponsored stories" in early 2012, the company didn't even release an iPad app until October 2011, well over a year after the Apple device became ubiquitous.

In September 2012, Zuckerberg admitted Facebook's stock performance had "obviously been disappointing", before noting that "it is really clear from the stats and my own personal intuition that a lot of energy in the ecosystem is going to mobile, not desktop".

Zuckerberg's realisation arguably came around a year too late, but while Facebook's current value of $29.30bn is still trailing behind its already-disappointing IPO value of $38bn, it could at least be said to be riding out the storm to an extent.

Twitter, by the looks of it, will be a different story. Bloomberg estimates that Twitter, which is hugely popular on mobile platforms, will be pulling in $1bn in advertising revenue alone by 2014.

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