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.
Erin Kennedy owns shares of Apple. Evan Niu, CFA, owns shares of Apple and LinkedIn. Jamal Carnette owns shares of Apple and Facebook. The Motley Fool recommends and owns shares of Apple, Facebook, and LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.