Twitter IPO Tech News

Twitter Stock Drops 7% After IPO

On Friday, Twitter launched its much anticipated IPO with the New York Stock Exchange (NYSE) under the trading symbol TWTR. The initial offer price was set at $26 but jumped 73% to $45.10 when the NYSE opening bell rang.  The decision by Twitter to launch its IPO with the NYSE comes after fears that Twitter might suffer the same technical problems that marred the Facebook IPO which caused many investors to loose millions of dollars. The cause of the technical problems experienced during the Facebook IPO were a result of the negligence of Nasdaq to prepare its systems properly for the IPO, the SEC has since fined Nasdaq $10 Million for its system failures.

Twitter has grown substantially since opening in July 2006 and has attracted a large amount of celebrities who prefer Twitter over other social media networks like Facebook. Twitter’s real time environment has  lead to it becoming the go to place for breaking news and live coverage of sporting events, television shows and product unveilings. Personally I like using Twitter to gauge other people’s opinions about special events like Apple’s product unveilings or current news events.

In Twitter’s S1 fillings with the SEC for its IPO, it was revealed that Twitter in currently unprofitable. Twitter now has the mammoth task of making its business profitable but turning Twitter into a profitable business is harder than it may seem. So far Twitter has 2 main forms of advertising, namely sponsored tweets and hash tags, whereas Facebook has numerous advertising forms including banner adverts, sponsored stories, links, pages and apps. Through user data, Facebook knows a lot more about its users than Twitter does, which makes it easy for Facebook to turn its knowledge about its users into advertising revenue. Facebook has a barrage of tools that make it easy for advertisers to create highly targeted campaigns, which ensure that the right people see their adverts. These advertising tools allow advertisers to target users based on their gender, location, educational background, interests and marital status among many others factors. Facebook also has a real time advertising platform know as the Facebook Exchange which allows advertisers to target adverts to users in real time with the use of cookies and other technologies.

Another problem Twitter has is Twitter syndrome, where people create Twitter accounts and then don’t know what to tweet, who to follow or why they are not gaining followers which leads  them to stop using the service. Twitter needs to fix this problem and it needs to get new users interested in using its service. Many analysts feel that tech companies are often over valued and as a result their stock prices plummet when they don’t meet the high expectations of their share holders. It is going to be interesting to see how Twitter generates the profits shareholders will start demanding. User experience and customer satisfaction normally drops sharply when companies are too focused on making profits for their share holders. Lets hope that Twitter is able to keep its users happy while balancing the demands of their shareholders.

Twitter Stock

Twitter Stock Drops After IPO


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