Yesterday, in a frenzied trading debut that evoked the heady days of the dot-com bubble, investors showed that few global moneyed-people have way much too much of it and are willing to spend it reagardless. Yesterday, they threw $25 billion at the seven-year-old company, Twitter Inc.
Investor enthusiasm for the microblogging company defied traditional valuation analyses. The shares traded at about 22 times forecast 2014 sales, nearly double the multiple at social media rivals Facebook Inc and LinkedIn Corp, even though Twitter is far from turning a profit and posted a loss of almost $70 million for its most recent quarter.
But loss or fear of loss ads spices to an otherwise boring life. It matters the same for those with way too much money as losing 30lbs matter to a 300-pound light woman. She continues to buy her clothes from Big& Tall.
Using analyst bullshit, here is Mark Mahaney’s reaching the same conclusion:
When people use Twitter they are following certain people, they’re searching for specific information, said Mark Mahaney, an analyst at RBC Capital Markets. There are powerful marketing signals that are almost Google-esque, something that Facebook doesn’t really have, because on Facebook your pictures are for the world to see while on Twitter your emoticons are only for those who can read them.
For more of the same, as above, only visual, see Actor Patrick Stewart (R) and 9-year-old Vivenne Harr (C), who uses proceeds from her lemonade stand to fight slavery, rang the opening bell.
[youtube id= imDjFRo_GJU width= 470 height=315]
My impression was the whole thing was so special invited investors could buy at $27 and sell to the suckers (aka. the rest of us) for $47 a few minutes later.
If Jasmine here is correct,, now Twitter has a track record of making money 🙂