Tag Archive | "twitter"

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Are Twitter Shares Worth Investing In?

Posted on 09 November 2013 by JasonK

So this week after 7 years of business, Twitter finally listed on the NYSE in an IPO. Shares were valued at $26 and only 70m were on offer.

Predictably the shares went as high as $50.9 inside the first 2 days and have now dropped back to $44.9 which gives them a market cap of $22.69 B*.  Screenshot below – is what happened on the first 2 days of the TWTR IPO.

twitter-shares

There was an option to sell a further 10.5m shares (called a greenshoe option) but at the time of writing I’m not sure if the underwriter have used that. Also not sure how much of a lock there was on existing shareholders who may not be able to sell for a set time period.

To put this in perspective co founders were reported to be holding 80.4m between them; Evan Williams 56.9m and Jack Dorsey 23.5m this means there was a risk of undersupply and huge market demand creating a hyped market price.

The Shares Outstanding of  544,697,000 means that less than 10% of the company was floated and it did what has been called a “secret IPO” and although it had $583m of revenue in the last year it did not have to disclose public financials; instead a confidential “S1″ was filed.

This lack of transparency makes it harder to value the company but luckily after 7 years there are some other numbers out there which can be looked at. There is a lot of debate about what the real numbers are and the public numbers are thought to be over estimated.

However one very key metric is called MAU or monthly active users. The idea is that if we can get a really good idea of how many monthly active users there are then we can link some of the business model  to that and build out some more reliable indicators.

The best analysis I’ve seen on this comes from Si Dawson. Si has some unique insights in that he was one of the early twitter developers and built an application to segment twitter users based on their real activity streams.

It was called twitcleaner and I used it for a couple of years on multiple twitter accounts that I ran.

key points
  • Twitter’s S-1 filing says they have 215+ million active monthly users (or 230m), and 100m+ daily
  • Based on a sample of 1.4m accounts, the actual monthly figure is 110m (46m daily)
  • Twitter claims 40% of accounts are active but never tweet. Since this can’t be proven (they don’t publish login stats), this is an easy way to raise their figures ahead of the IPO
  • Since 2009, spam on Twitter has increased 2300% (spam is now 93% of all signups)
  • Twitter is 1/10th the size of Facebook, but has 1/15th the level of daily engagement
  • Over the 7 years of Twitter, only 2% of signups become active daily users (5% monthly)
  • Twitter is short term, Facebook more long term (eg wedding albums, holiday snaps). Daily actives is MUCH more appropriate for Twitter; ie it’s 1/19th (901m/46m) the size of Facebook
  • Facebook floated at $104b (massively overvalued, it took 15mo to return to that level) on 901m users. 1/10th-1/19th means Twitter floating at $5.4b-$9.7b (~$8-$14/share) would be similarly overvalued
  • These valuations obviously only apply IF you believe that Twitter hasn’t already peaked, will experience the same growth that Facebook has AND is able to monetize successfully

[All figures based on the analysis below. Analysis done 3 Oct - 7 Nov 2013]

A key point to note here is that Si used real actual data from almost 1.4m profiles

If you are interested in the full analysis and the methodology that Si uses  you should check out the full post it is solid work and the assumptions and caveats he makes are all well informed.

These days I work mostly in online marketing, web development, education and futures development but in a former role I was director of research & analysis for a merchant banking partnership that I helped to setup in the early 90′s.

A key question for all businesses is to be able to understand where they create value for all stakeholders and how that might feed into a valuation. For fast growing companies with new business this is a lottery but some of us have seen this type of financial market behaviour before.

As Si notes

“Frankly, I love Twitter. I’ve met so many incredible people through it.However, in the last few years Twitter has focused on monetisation at the expense of their users and their external developers (dozens of others have been affected, not just myself).

Which means ultimately, Twitter the community has suffered enormously. Prioritising money over users/product/experience is bad enough, but developers are what helped make Twitter great

This kind of attitude is damaging to the long term viability of the company, but makes perfect sense if you’re just trying to ramp up the numbers ahead of an IPO.”

Si has highlighted one of the key risk factors to me and that is the user experience. About a week ago Twitter made inline images all viewable for all desktop twitter users. We are guessing this might make it easier to drop some form of banner ads into the timeline but that ignores all of the research on “banner blindness” from other online channels.

For all sorts of reasons that is plain annoying  and will drive users away from the actual twitter application. For about the first 2 years I was on twitter I mostly used Tweetdeck, Twitterific, Hootsuite and some other twitter clients I cant remember now.

Back in 2009 I wrote about Creating Value on Twitter  and many of those observations still hold true.

This is a risk factor quoted form the actual S1 filing and Twitter would do well to really look at this one.

users believe that their experience is diminished as a result of the decisions we make with respect to the frequency, relevance and prominence of ads that we display;

Despite the share price craziness I too love twitter because of the people on there that I follow ( as @dialogCRM ) In my view a small number of twitter users have a disproportionate level of influence and that is a quality indicator not recognised in the share price.

On a good day, communication between savvy twitter users – (both in public and via private direct messaging) makes the planet a better place but forget buying those shares – in my view.

* here is a screenshot of the key numbers off NYSE because these will change when trading restarts.

twitter-nyse-8nov

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The News We don’t Hear About

Posted on 02 July 2012 by JasonK

Have you ever wondered what the real news is? One way of discovering what is really important to different readers is to look at media where there is a ready flow of comments.

The Economist does this quite well with live bubble style graphics being generated by topic.

Last week I had a look at this to see what the real stories might be – because – lets face it some news channels like TV are 98% entertainment and formulaic in the extreme.

These charts relate to 25th of June but you can pick any date and sort through the topics to see what makes sense or not. I like the way these comment bubbles give an indication of the “news behind the news”
.
Trending topics – Read comments on the site’s most popular topics – and best part is that you can delete various bubbles so here is the first i the sequence – which is the full picture with no edits.

First of all the Economist is UK based but has 20 correspondents abroad in SF and NY as well as in London which is still home base. I think of the Economist as Eurocentric but looking at the comment bubble maps it looks more international now.

In this one I was surprised that the US & Israel had such big coverage.

30-days-conversation-economist

30 days global

Here is version 2. I stripped out China and India cluster to see what would happen. The big news story this week was Greece but you can’t see that in the comment bubble stream. It is almost as if the lead story on TV news is being ignored by these Economist readers.

And Syria – is almost completely missed despite being a major bloodbath ? Is this because ther was too much coverage of Syria or not enough by comparison. I had to look up Angus Maddison but topic like that I also just zapped off the chart.

Each time you zap a bubble the next best cluster relocates and often new topics emerge as they do when I tried drilling down on the US whcih are the last two snapshots in this sequence.

comments with China & India stripped out

Here is view 3

Looking at a more US centric view – version 1

And final version for today. The idea here is to use the visual data modelling thinking to strip out some of the noise to signal ratio and try to understand what the real concerns are.

If I was in the editorial team at the Economist – I should think this might be a useful side calibration kind of compass.

This is a fairly crude way of looking at what Economist readers think is interesting to them and what engages them enough to pick up a pen or keyboard.

What do you think? Where do you get your news and how much filtering ( like snow grooming ) is going on.

When is the news just another information product and the media just another sideshow ?

I have been writing for 40+ years now* and for the past 15 pretty much ignoring TV and newspapers for the past 10. If I am in a new city I like to look at the newspapers and I have written for plenty of them but really twitter is my main story feeder.

I do follow quite a few journalists on twitter and as they are in many cases the leading pundits for their respective journals so as sources they are quite insightful.

I do listen to National radio but only when I am driving & can’t really do anything else. Public affairs radio seems to me to have the best commentary on the leading stories but again – I track those via twitter first and decide which ones to listen to.

Often that is later by podcast or iphone app which is the same thing.

* Ok 40 years ago my first published work involved cats and very bad poetry but in 1972 we didn’t have much happening in our little town. I find it hard to believe that the internet si still stuck in 1972 for many people if the gazillion stories about cats is actually true but go figure – I moved on – or have I?

Here is a full sized live link to Economist stories depending on when you look it will show a different view but at any point in time I think it is a kind of litmus test of “the news we don’t hear about. “

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Gavin Blake at 2020 Summit – Creative Australia

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TEDxAuckland on Sept 26

Posted on 10 September 2010 by JasonK

The 16 speakers for TEDxAuckland have been announced this week. Here they are with twitter links where I could find them – feel free to adapt and share with friends. The event is on Sunday 26th of September.

  1. Cindy Gallop – The world is coming to TEDxAuckland with Cindy Gallop @cindygallop1 founder & CEO of IfWeRanTheWorld.com, a radically simple web platform designed to help change the world
  2. Tim Gregory@gregorytim making a difference at TEDxAuckland tim gregory create a self-sustaining movement for community based programs, social and environmental initiatives in Waitakere…
  3. Stephen Knightly: we are pleased to have a real game changer speaking at TEDxAuckland @sknightly will talk about gaming
  4. Dr Divya Dhar @divyadhar will share her ideas at TEDxAuckland @P3Foundation
  5. Ken Ring: Can we predict what Ken Ring will talk about at TEDxAuckland? @kenringweather
  6. Julie Bartlett A true star is joining us at TEDxAuckland this year @starjam Standing Ovations Disabled Kids Changing Lives www.starjam.org
  7. Renee Liang – 3 Minute You will need to be prepared for Renee at TEDxAuckland poet, playwright and fiction writer.
  8. Richard Loseby author – has found his way to TEDxAuckland and has a fascinating story to share Looking for the Afghan http://ow.ly/2Ah56 (Note: Loseby book not as good as Shantaram but pretty close.)
  9. Dr Privahini Bradoo With great thanks to Air New Zealand we are so pleased to welcome Dr Privahini Bradoo in helping us bridge the gap. Spark and Chiasma, building links between academics & the local biotech industry.
  10. Jonathan Milne of Learning ConnexionNZ’ biggest tertiary art school
  11. Richard Webb We have a feeling that TEDxAuckland is going to be disrupted by Richard Webb @richardalexwebb
  12. Plum Jungle  @PlumJungle Award winning film makers rock on up to TEDxAuckland.
  13. Kate Smith  Hooray! We will be eating big fish at TEDxAuckland. @katesmithnz see also @eatbigfish
  14. Team One Beep Can you imagine our excitement of having One Beep come to TEDxAuckland. They wono 3rd place Image Cup from 325,000 students from over 100 countries entered the competition http://ow.ly/2AiUL
  15. Justin Scott @justINvitallink – 3 Minutes It is real treat, a gift even, to have Justin join us at TEDxAuckland
  16. Richard Hollingum – 3 Minute The Director of Doing does the doing at TEDxChange

This clip below is Richard Hollingnum speaking with Glenn Williams of @radiowammo a couple of days ago about the background to the event and speakers.

I’m very pleased that we featured Richard Hollingnum at the recent WordCampNZ event in Auckland.

We also spotted Justin Scott of Vital Link and very pleased to see him with a spot onstage after he shared the Vital Link project at WordCampNZ. An awesome event. Will I see you there ? Tickets link is here.

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