
The Twitter IPO: The numbers behind the hype - richardburton
http://blog.timoshea.co.uk/twitter-ipo
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programminggeek
Twitter is a good middle term 5-10 year investment, but not a great long 10+
year investment. I have no idea if it is a good buy with the pricing they
have.

Twitter reminds me of AIM (AOL Instant Messenger). Back when AOL was a big
deal, AIM was how you chatted with people and the network effects of that were
incredibly huge. Everybody, every brand, everything was on AOL. Then, the
landscape shifted and high speed internet made AOL irrelevant. However, AIM
was still around and a lot of people used it for years after they quit AOL.

Twitter's big risk isn't the next few years where it's still hugely popular
and integrated with media everywhere, the risk is in 5+ years when something
else comes along. Will twitter have the staying power of Yahoo, Google, and
Facebook, or will it be more of a AOL/MySpace kind of thing?

I really have no idea, but I wouldn't bet on Twitter for more than 5 years.

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nicholassmith
That's an interesting take, I think Twitter has long term growth potential but
like the article says it's not Google and I don't think it ever will be. When
Google filed for IPO it already had one of the biggest ad networks online,
whereas Twitter is still growing.

Honestly I'm surprised Twitter has filed so early, I'd have thought next year
would be more likely. If I was investing (and I'm not), I'd mark it as a risky
venture, the business is clearly changing at the moment but it's still
certainly growing in the metrics and it has an increasingly large amount of
visibility in mainstream media. They do seem to have a strategy though.

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brianbreslin
I'm very skeptical of the twitter IPO for a few reasons: \- Monetizing their
stream is not easy \- Few advertisers in their network are raving about ROIs
\- My experiences as a platform developer have been better on other platforms
\- Their support for their ecosystem is lukewarm at best \- The vulnerability
to other mediums (insta, snap, etc etc) in the key markets for advertisers are
also very risky \- Facebook I think is still going to crush them from an
experience standpoint.

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TheBiv
I was expecting a more in depth look at the different markets these two play
in, like how much was the search market worth and how much was Google
capturing at IPO vs. twitter's relative numbers.

I think really the hard part in comparing these two companies are how users
derive value from the two services.

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jfasi
Can we please stop drawing conclusions about tech companies from their revenue
figures? At this point it's a tired trope on hacker news that technology
companies' valuations can't be explained by traditional equity analysis
techniques.

Technology equities have highly variable price to earnings rations because of
the expectation of greater growth in the future. This expectation means
investors are effectively speculating about the future growth of the company,
rather than making decisions based on classic quantitative methods like you
would apply to an older company in a better understood industry. Applying
these methods ignores this dynamic and also buys into the myth of the
quantitative analysis that's so appealing to mathematically minded geeks like
ourselves.

I submit that the only thing posts like these really accomplish is letting the
author stroke his or her by using big words and apparently clever concepts,
while simultaneously making it clear that they're misunderstanding the market.

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programminggeek
If what you're trying to say is that the market prices tech companies
irrationally and people should get over that, then yes I totally agree.

A smarter model for valuing tech companies would look at what their actual
worth is, then separately factor in some kind of "bubble factor" or
"irrational exuberance" factor that would price in the sentiment of people
buying/selling the stock itself.

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jfasi
Again, you're missing the point and buying into the myth of the quantitative
analyst. Irrationality and emotion are like a balloon: you squeeze on one end
by implementing a bubble factor (however you defined that...) and the
irrationality comes out on the other end.

