Twitter could be worth up to £7 billion as the company prepares to go public in 2014 according to a news report.
The Guardian reports that the social networking site has been given its rough valuation by specialist financial research company Greencrest with findings based on trading in secondary markets.
There are rumours that Apple has shown an interest in acquiring Twitter, further increasing its estimated value and the study suggests that Twitter will start preparations to float the company by the end of this year.
News articles on forbes.com note that Twitter has recently made some changes to its management team to ready itself for public trading. It has also overhauled its picture application as well as ensuring promoted tweets are directed at the right users.
Max Wolff, an analyst for Greencrest was reported to have said: “Using the secondary market for shares to mark enterprise value is a very difficult and opaque process. It is a rumour-rich and special share class soup.”
He went on to say: “That said, Twitter is up since the Facebook IPO and is now valued at northward of $11 billion. This makes sense as growth in users and new monetisation efforts are both yielding fruit and pointing toward a good 2013 for Twitter.”
Commenting on the Guardian report, Graeme Wood, Communication and Social Strategist, at global marketing and technology agency LBi said: “Twitter is successfully growing its revenue model – Promoted Tweets and Trends are a fantastic tool for brands, and have yet to cause any sort of public backlash. It is also centralising its growth around its own platform, in a way that has only annoyed developers and tech journalists, not the general public. Most importantly, Twitter has kept celebs, TV and news brands onside, as they are what keeps normal people on Twitter. They are growing faster than ever, and their valuation is [currently] low enough that institutional and individual investors scared off by the fallout of Facebook and Zynga would be interested. In short, there’s no reason why Twitter’s growth trajectory should slow down before May 2014.
“Clearly the challenge then will be in what happens to their finely honed resonance algorithms and customisable news feeds when quarterly results are at stake after an IPO. I think any move towards an Edgerank type approach of algorithmically selecting the content in an individual’s feed would feel like a move away from their mission to me, as Facebook has since their IPO. But Facebook’s IPO has generated so much fallout because it was overpriced, not because it is inherently unsuccessful – the speed with which they have changed the platform has increased because of the overpricing, and has been under greater scrutiny because of the bad PR, so there is much that Twitter will have learnt from.”
