Matt Levine, Columnist

Twitter Sold Some Stock

Did you know Twitter had an IPO today?

November 7, 2013 at 5:46 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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A little-known1 provision of the Financial Blogger Code of Conduct says that I have to give you my opinion on what Twitter is worth, but it doesn't say when, so I figured I'd wait until it had traded for a bit. It's worth $45.25! Or whatever, I don't know, that was a while ago, that number changes rapidly, look at a screen, there's your number, you're welcome.

Of course, I could have gone other ways. I could have done some sort of DCF-y valuation; FT's Lex column produced a delightful tool to do just that and you might want to play with it.2 The problem is that a discounted cash flow model takes future cash flows, monkeys with them, and spits out a price, so you have to know the future cash flows to make it work, and you don't. A DCF on Twitter is just a way to dress up guesswork in pseudoscience. Guessing the price directly is no sillier than guessing the next 10 years of revenue growth and operating margins.3 Ten years ago I was on Friendster.