Will Twitter’s IPO Run Into the Same Problems as Facebook?
Twitter Inc. is set to have the largest Silicon Valley initial public offering since Facebook Inc. (NASDAQ:FB) raced onto the scene in 2012, inviting more than a few comparisons between the two tech giants as investors mull the potential stock prospects that Twitter offers. While Facebook has more recently begun to right its ship after its initially difficult IPO, the company’s progress over the last year might give investors a preview of what to expect when Twitter goes public.
Twitter, which is set to trade under the stock symbol TWTR despite its inclusion on the Nasdaq or NYSE being undecided, is now eight-years-old and has seen explosive growth from its roots as a side-project to a socio-cultural mainstay. The real-time communications platform has become one of the foremost sources for breaking news and includes famous people such as President Barack Obama, the Pope, and various celebrities and sports figures among its user-base.
But once Twitter goes public, it will have to prove that it can continue to earn revenue — a task that Facebook found out the hard way is easier said than done. By the end of May 2012, Facebook’s stock had lost over a quarter of its starting value, leading the Wall Street Journal to call the IPO a “fiasco.” After opening on May 18, 2012 with an offering price of $38.00, Facebook’s stock plummeted through June before settling around $31 in the last months of summer. The stock price would later collapse to the lowest in the company’s short history, before displaying a steady rise to its current share price of $51.04.
The 52-week range for Facebook has seen a low of $18.80 and a high of $51.60.