Is Twitter Valuation a Good Deal for Investors?

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Oct. 25 (Bloomberg) -- Richard Windsor, founder at Radio Free Mobile, discusses Twitter seeking a $10.9 billion IPO valuation, what the risks are and how revenue projections look going forward. He speaks on Bloomberg Television’s “The Pulse.”

On the headline numbers.

If you look at the valings and the sthralings valuation that we have done on the company.

It looks to be around 13.5 billion, which when you look -- start to look at the number of shares out there, there is some pretty good upside, both in terms over the lowest and the highest amount.

On the headline, number of shares.

The problem comes when you look awhat is included in number of shares.

And what isn't. for some reason, the number of shares in the s 1 is actually excluding some share options and some stock units.

When you put that in and do the calculation, what actually pops out is share price valuation post money, 92.6 instead of the previous estimate which is around 25. ryan chilcote here.

Speak to risk, when you look at the fundamentals of the business.

When you invest in twitter.

Is this a company till losing money.

It is still growing but slowing.

What are the chances this could actually twitter in general is an experiment in social media, could end up as a flop.

I think that is unlikely.

I've been over the last -- i've been a bit cautious on twitter.

The reason is because their offering is very, very narrow when you look at all the other things you could do or are available services on the internet.

Based on the nall sis that i've done on the mobile ecosystem, that still gives twitter a revenue opportunity even that very narrow segment of about $2 billion.

If you look at the estimates where they are going, you can see twitter is not going to run out of revenue growth before 2016 and even some of the longest term investors, that is probably well off their horizon at the moment.

At the moment, i don't think that is a big issue.

They have a revenue mismatch between where the users are.

The ad base is in america.

The users are elsewhere.

How do they close that?

Well, i think the other thing is you get this very long lag between where the users are, where the traffic is and where the revenues actually come from.

That is one of the reasons why if you look at the trajectory of user growth over the next few years, it is much, much slower than the revenue growth, because what they are treal doing is moving to mono-- actually doing is moving to monetize.

I think what you'll see is a natural course of events, you'll see those two numbers start to match up as they become more fitchett at monetizing -- efficient as they continue

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


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