Twitter's IPO Price: Cheep?

Earlier this month, Twitter (NYSE: TWTR  ) filed its S-1 in preparation for its initial public offering. The only thing missing was the opening price. Twitter finally released those numbers and raised eyebrows by announcing that it would price itself between $17-$20. Puns aside, the pricing is quite cheap compared with its social-media counterpart: Facebook (NASDAQ: FB  ) .

At the mid-point of this range, this would value Twitter at roughly $12 billion including options and restricted stock units -- one-tenth the size of Facebook. Twitter has roughly one-fifth the users of Facebook and valued itself at $20.62 per share in August.

Could this point to a social-media bubble? With Pinterest being valued at $3.8 billion in a financing deal and Facebook and LinkedIn sitting near all-time highs, are social-media companies valued too richly?

In this segment of Tech Teardown, Erin Kennedy discusses Twitter's IPO and what it means to the social-media investing landscape with Jamal Carnette and Evan Niu, CFA.

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  • Report this Comment On October 28, 2013, at 4:19 PM, Chippy55 wrote:

    Did anyone else bother to click that link for the video that goes on and on and on without getting to the point? In other words does anyone know the name of the stock that the Fool keeps droning on and on and on, gosh I hate their videos. They just talk on and on and on without getting to the point.

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