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The Implications of Twitter’s Forthcoming IPO

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​Twitter’s IPO filing was announced quietly on Thursday evening by a tweet (typical). It was reported that the social media company filed an S-1 with the Securities and Exchange Commission (SEC.) This document signifies the plan for Twitter to launch an Initial Public Offering (IPO).

Twitter’s IPO filing was announced quietly on Thursday evening by a tweet (typical). It was reported that the social media company filed an S-1 with the Securities and Exchange Commission (SEC.) This document signifies the plan for Twitter to launch an Initial Public Offering (IPO).

Little information is available to suggest when this will actually happen, but it is believed that it will not be in the immediate future. The question is whether or not Twitter is a good investment? And what does this mean for social media and digital marketing?

Despite its enormously popularity and remarkably increased revenues, it’s hard to know whether or not Twitter can be profitable now or going forward. Twitter is currently privately held, which means its financial statements are not readily available to investors. Additionally, Twitter may have difficulty competing with similar social media networks such as Facebook and LinkedIn whom have had incredible success in tapping into social networking for profit.

Alternatively, Twitter could be massively profitable. For example, Facebook shares have peaked and LinkedIn is up about 170 percent. The environment is ripe for another booming social media stock and the Global X Social Media ETF has performed exceptionally well in the past year. This positive energy surrounding social media is surely encouraging to investors and social media agencies.

However, I would speculate that the IPO could present real challenges for Twitter. As a publicly traded company, Twitter would have to put a serious emphasis on profit in order to appease shareholders. This pressure would require them to really step up their game in regards to digital advertising revenues. The impact on digital marketing would be astounding because like other social networks, their success comes primarily from the users of social media.

If Twitter was to charge for accounts or integrate annoying ads, it could cause some users to leave. Twitter must be careful to satisfy both members and shareholders. Finally, the buzz surrounding Twitter could be fleeting, as was the case with MySpace. Investors and digital marketers alike should be interested to follow Twitter’s IPO status

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