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Twitter’s Current Valuation Per Share / Per User and Its Future

Twitter is still very much a private company and a Twitter valuation is pure speculation at this point as it is a fast moving target. It has been rumored that the company may go public in 2013, but recent developments suggest a different picture, particularly in light of the recent disastrous Facebook IPO, where the stock price quickly plunged by 25% in just two weeks. Some observers have even speculated that the Facebook IPO may have marked the near end of retail investor interest in IPOs.

Twitter Valuation as on Jun-2013 ($9.9 – $10 Billion)

Source: Value by Auctioneers and Valuers Like BlackRock, GSV Capital etc.

Speaking in October 2011 at the Web 2.0 Summit in San Francisco, Twitter CEO Dick Costolo confirmed a $8 Billion valuation for the company and offered some insight into Twitter from an insider’s point of view.

Here is a highlight of the of Costolo’s Speech:

  • Twitter delivers 250 Million tweets a day, 1 Billion tweets every 4-5 days, as compared to 90 Million a day a year ago.
  • Out of a total 254 Million users, 100 Million are active, with 50 Million being daily users.
  • Number of new signups tripled soon after the launch of iOS5 by Apple.
  • Twitter’s success still lies in its simplicity and the company intends to stick to its roots going forward.
  • Twitter is a free speech platform and will respect the philosophy of its users under any circumstances.
  • A Twitter IPO will only occur when the company feels well prepared to undertake this step.
  • Ads will focus on richer media content in the future, including video, which was introduced in June 2011 in the form of native multimedia sharing, and interactivity.

Twitter is said to have had revenues in the $140 Million range in 2011, and a $8 Billion Twitter valuation would suggest that the company is currently valued at 57 times revenues, very rich for any company, especially since the company does not report losses or profits.

Nevertheless, CEO Dick Costolo seemed to be intensely focusing on increasing ad revenues in 2011, presently still through Promoted Tweets, Promoted Trends, and Promoted accounts. Political advertising also looks to be more significant as Twitter has just opened a Washington, D.C. ad sales office.

eMarketer estimates that revenues may reach $400 Million in 2013, an enormous boost for a company that did not even have a business plan a few short years ago. Brand advertising will also become a healthy source of additional revenues, as Costolo noted that Virgin, a major advertiser, had its fifth best sales day following a Twitter ad campaign.

Trading on SharesPost furthermore suggest a Twitter valuation per share of between $31 and $34.50, for a total Twitter valuation of between $6.8 Billion and $7.7 Billion in the private market as of September 2011. However, on May 2, 2012, the Wall Street Journal reported that Firsthand Technology Value Fund had purchased 100,000 Twitter shares for only $1.8 Million, implying a Twitter valuation per share of only $18.

However the current Twitter valuation plays out, it is fair to assume that Twitter still has very bright prospects, particularly with Twitter firmly integrated into iOS5. As a matter of fact, one Facebook user noticed that her son and all of his friends have recently migrated to Twitter from Facebook, noting that Facebook is now perceived to appeal to the wrong age group, the parents.

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