1. Experienced Leadership
Twitter's key founders - Co-inventor Biz Stone, Chairman Jack Dorsey and CEO Dick Costolo - are a different a breed of innovators than Facebook's Mark Zuckerberg. While the latter has the honour of being a wunderkid in the internet world when his college project turned into a multi-billion dollar enterprise, the former are tried and tested start up businessmen of the digital world.
Zuckerberg was always hesitant and in denial of Facebook's need to go public. The pressures and the skills required to manage a corporation are very different than being a software innovator, and in that respect Twitter's management not only know the product they created but also the value of leveraging the bullish social media trends to make the most of market opportunities. In contrast, Zuckerberg had to go to the market for funding even after his company was reporting billion dollar revenues.
2. Balanced Sales Size
As the dates for Twitter's IPO approached the number of shares on offer remained steady at 70 million with an additional 10 million to be sold. A plan well conceptualised and implemented to control the value of the shares and retain control over the management. Facebook on the other hand raised the size of its IPO by the day of the offering.
Twitter raised $ 1.8 billion with the market valuing the company at $31 billion, whereas Facebook raised $18 billion (including restricted shares) and reached a valuation of $100 billion. Considering Twitter's complete lack of profits over the years and Facebook's billion dollar revenue history, this looks like a magic trick by Twitter's management in handling the IPO.
3. Seemingly no Insider Trading Issues
The Twitter IPO made a spectacular appearance on the market overwhelming all expectations. All funds raised are planned to be directed towards growing the business and usual corporate expenditures. However the controversy of Facebook's over-valuation of prices along with the redirection of funds towards the pockets of a handful of early shareholders instead of the growth of the company makes Twitter seem like a sleek austere business as compared to Facebook, which looks bloated. While we'll have to wait and see, setting a lower price in fact might have helped Twitter, even if some accuse it of leaving money on the table.
4. Market, Not Bank Support
As the Twitter IPO went through on Wednesday night, Twitter's bankers could rest easy the next day. Due to Twitter's trading rate throughout the day its banker's remained uninvolved in managing the price of the shares whereas in Facebook's case Morgan Stanley had to actively buy Facebook shares at $38 to make sure that it did not dip too low.
5. Low key is cool
While the debate will continue about whether Twitter priced too low, a smooth IPO will ensure, successful future fund-raising. And here, Twitter has done the smart thing, by staying away from the hoop-la.
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Updated Date: Dec 20, 2014 23:51:21 IST