CEO & Co-Founder, Boxer
“When the highly anticipated Twitter IPO finally arrives, the initial reaction of the market is likely to be far more reserved compared to the excitement surrounding the Facebook IPO. It is unlikely that Twitter will be able to build the sort of initial demand seen by Facebook, unless they are willing to substantially undervalue their shares.
What is more interesting, however, is a comparison of the long-term prospects for these companies. The Facebook IPO appeared to have obvious untapped monetization opportunities in mobile and off-site advertising, and its deep demographic data positioned them as a real threat to Google’s (GOOG) online advertising dominance. In a pure advertising model, it is less clear where Twitter can go to further monetize their smaller user base.
That said, if its valuation on the secondary markets hold true and Twitter arrives on Wall Street with a market cap in the neighborhood of $9 to $11 billion, investors may look at Twitter as a steal despite the uncertainty of its long-term monetization options.”