In less than 140 characters: I am manifestly bullish on the Twitter IPO.It is my view that Twitter's shares will likely double in the first month of trading -- or maybe sooner. Twitter is the largest source of public conversation in the world. With over 230 million active monthly users and more than 500 million tweets daily, the unique structure of the Twitter experience brings the company smack in the middle of both the mobile delivery of content and advertising. In the most recent three months, 76% of the company's monthly active users accessed Twitter from a mobile device. Over 70% of Twitter's ad sales are generated from these mobile devices, and the company expects that the proportion of active users on advertising revenue generated from mobile phones and tablets will grow in the future. Looking forward, the larger the user base becomes the greater the value proposition will be for advertisers -- and the greater the worth of Twitter's shares. Given the lack of competition in its space, Twitter's current monopolistic market position suggests a likely quick acceptance as an "anointed stock," replicating the action of Internet service provider America Online (AOL) in the early 1990s and Internet goods seller Amazon (AMZN) in the mid to late 1990s. As such, Twitter's share price may not be required, as most stocks are, to achieve visibility of early profits. Indeed, pegging the company's share price (similar to AOL and Amazon back in the day) to the traditional metrics of profits and cash flows will not likely be a headwind to appreciation over the next few years, as its dominant market share and top-line growth will be conspicuous.
Just When I Thought I Was Out, Twitter Pulled Me Back In
"Just when I thought I was out, they pull me back in." -- Michael Corleone (Al Pacino), The Godfather: Part IIIThe irony is not lost on me that while I am a bull on Twitter's IPO, over 100 days ago (with more than 65,000 followers), I decided to discontinue tweeting for personal reasons. At that time, I found it too cumbersome to navigate the Twittersphere of sharks in order to find the good fish. (Note: I further discussed my rationale for leaving Twitter with Joe Nocera of The New York Times.)