How Will Twitter Do as a Public Company?

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Nov. 7 (Bloomberg) -- Bloomberg Contributing Editor discusses Twitter's debut and pricing with Emily Chang on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

That is what mark zuckerberg said about twitter.

I actually think it will surprise people.

They are a surprisingly conservative management team.

You saw in the interview with dick costolo earlier.

He says what he will do.

He is an operator.

He says that these are the things i will focus on.

He will do those kinds of things.

In the public market, as much as we want the next steve jobs and a visionary, you do not get much of a premium for that.

People want predictability in quarterly earnings.

They will get more of that.

Of -- in terms of when they will turn a profit, does not sound like he is planning on that anytime soon.

But they can when they want to.

As revenues grow and the control costs, they can drive cash flow to the bottom line.

They're looking at 30% to 50% ebitda.

Now they raised 1.8 billion dollars.

Cory johnson, what you think about what it cost a look at to say in terms of continuing to invest of the project, not thinking about the top line?

First, i thought it was a great interview.

He gave some real answers instead of just babbling off the lines that they were told to say.

I think it is clear that for this company, this ipo event is just a single day in a long chain of events, including a lot of financing events.

They managed the sale of the stock in private markets for well over two years.

They have managed those carefully so that they can have control over them.

Similarly today, what he saw in the ipo was a very managed process.

They only offered up a limited amount of shares.

They got the price right for the first day of trading with the help of goldman sachs.

I think what we saw here was a very managed company, a professional company.

The thing you started with -- the fact they raised $1.8 billion, that gives them a long runway to sustain many years of losses, and that is before they go on with a secondary and can raise even more money.

That allows them to kind of ignore the potential concerning the profit and also give them a cushion with these markets which george would not call a bubble but called frothy earlier.

Twitter is in a better position now to survive a downturn.

What happens to the venture investors that have been so active in the company development and have been part of chaotic wardroom -- board room conversations?

That is not what you're paid to do as a venture investor.

I am paid to get them to the point where there is liquidity and they sell the stock.

Venture investors are not bad guys.

I am one.

But you want people -- the right people involved.

We are taking companies from 2000 employees to 5000 employees and more.

I want to take you from zero to 100 employees.

After that, there are other people.

We did not see a lot of the insiders sell their shares, including the biggest holders.

With facebook, we did.

What does that mean?

They learned the lessons.

It is a bad sign with a newly public company focusing significant insiders selling.

It was baffling during the facebook offering.

So it was refreshing to see none of that going on in the twitter ipo.

Of these are not collectors items.

-- but these are not collectors items.

They will be sold.

Cory, how is twitter similar and different from the facebook debut?

Let's separate the trading aspect.

We know the nasdaq really muffed that and maybe morgan stanley placed it in a way where it would not sustain the price.

But the valuation on this stock, the market is pricing this thing , the company, at the highest evaluation of any technology stock with over $500 million period.

In all of the public markets in the u.s., you can only find a handful of biotech and companies without products that have a price to sales ratio that is higher.

There is so much optimism in this.

Facebook had lots of results.

With profits, cash flow, and stunning global growth.

Twitter is a company that only suggested maybe someday they can get their, yet it is getting a richer valuation.

That says a lot about the market we are in and the economy we are in.

And the ecb rates coming down today and flooding the market with cash that is going to twitter.

Paul, i asked george zachary this question.

We asked dick costolo how long he would be in the ceo post.

He is a startup guy.

He said i have not thought about it.

What did you think of that?

He thought about it.

Of course.

My guess is he will stay in long

This text has been automatically generated. It may not be 100% accurate.


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