As Twitter IPO begins, a look back at Facebook’s IPO
The world’s second-most popular social network — Twitter — goes public today. For months, experts and investors have been comparing the Twitter IPO with Facebook, using Mark Zuckerberg’s social network as the basis for what Twitter can do for success.
Already, Twitter appears to have had a much more successful first day than Facebook, but how will the first year go?
Twitter had an initial value of $26 (Facebook opened May 18, 2012 at $38), but the stock has risen tremendously throughout the day. As of 11:30 a.m. PST, Twitter’s stock value was roughly $46.70 and climbing. It hit a high of $50.09 in the morning, before settling back down. By 12:15 p.m., PST, Twitter had surpassed Facebook.
Facebook rose marginally in its first day, to $38.23, but fell precipitously after that. It dipped below $20 in August 2012 and didn’t truly start to rebound until November. For the first several months after Facebook went public, there was doubt about the company’s long-term health (as many financial insiders still viewed Facebook as a novelty for memes and cat photos, not commerce) and even calls for Zuckerberg to hand the reigns over to Chief Operating Officer Sheryl Sandberg.
Facebook started to become smarter about mobile advertising, proving to investors that it can be a viable option. The previous two quarters have been wildly successful for Facebook, which has beat projections and appears primed for another big fourth quarter.
What can Twitter do to avoid Facebook’s swoon? Joe McCormack, CEO of Facebook PMD Adquant, shared with Inside Facebook his thoughts on the Twitter IPO:
Twitter’s IPO is very well timed and should be a very good investment. Twitter has a strong mobile presence at a time when mobile advertising marketing is starting to grow as a rapid pace. Twitter is strong with the younger demographics at a time when TV is losing its grip on advertising to the cool crowd. Big brands are very interested in Twitter’s users, and performance marketers will be able to capitalize on the real-time advertising that sponsored tweets provide. Twitter will also have the benefit of learning from past social network IPOs like LinkedIn and Facebook.
Taking a company public is no easy task, especially in the social media industry. Every action the company takes will be scrutinized by investors, analysts and the media. Privacy issues are a big concern that will take away focus and resources from the main objective. And, for a public company, the main goal should obviously be to drive the maximum value and meet or beat market expectations.
Readers: How do you think the days and months will go following the Twitter IPO?