Twitter Shareholders Cashed In Big Time, But Is $31 Billion Justified? Ms. Bels Friday, November 8, 2013 The Receipt, Your Money and You Photo Credit: Richard Drew/AP Yesterday was a great day for owners of the “TWTR” stock. The messaging app opened up publicly and instantly created gigantic wealth for many as the stock closed at over 70%. When Twitter opened the doors for a selective few to purchase at $26, analyst had no idea the stock would soar to $44.90. This instantly created the flood gates for individuals to quickly sell their $26 shares and turn a complete 100% profit. A lot of millionaires (and some billionaires) were born yesterday. But, Twitter has to now figure out how it will maintain a $31 billion market value. Experts believe this is where they will suffer in the long run. Unlike Facebook, Twitter hasn’t been able to turn a profit. It’s advertising revenues aren’t generating the money many thought it would. Several reasons could be that advertising on Twitter lacks visual appeal. On Facebook, you can see a picture of the product instantly. You do not have to, literally, “click-thru” an url link in order to see and fully understand what product or service is being sold. Also, Twitter 140-characters only policy can ruin a company’s ability to impact the consumer through words. So, advertising is clearly a troubled area for Twitter. Another area of concern is the global impact of Twitter. Although 232 million of Twitter users are internationally-based, their global ad sales are far from stellar. The numbers don’t add up. Therefore, Twitter tells the Associated Press that it plans to hire more sales representatives in various locations across the globe (i.e. Australia, Brazil, and Ireland). Do you believe Twitter will maintain its leverage? Let us know what you think.
