Analysts estimate that social media juggernaut Twitter could be worth up to $15 billion.
Twitter announced its intentions to file an IPO earlier today, which has sent insiders scurrying to decide just how good a bet Twitter will be.
Companies are usually valued according to their underlying profit, but it is likely that Twitter is still loss-making as the company invests to grow. Because it has filed for a confidential initial public offering, financial details remain hidden for the time being.
So the easiest measure to use is revenues. PrivCo — which gathers information on private companies — believes the float will be “conservatively priced” at 20 to 30 times revenue. With 2013 revenues expected to exceed $500m, this would make Twitter worth between $10bn and $15bn.
“Twitter will learn from Facebook’s flawed playbook and do the opposite,” PrivCo’s chief executive, Sam Hamadeh, told the Guardian. “Unlike Facebook, which waited too long to IPO (until its growth rate decelerated), Twitter will IPO at just the right inflection point: while revenue grows in triple digits.”
Twitter is still seen by many as ripe for continued growth. Research firm eMarketer reported that Twitter’s revenues will nearly double to reach $950 million by 2014.