UPDATED 07:42 EDT / NOVEMBER 07 2013

NEWS

Twitter IPO: 3 things investors might not know

Twitter has finally announced how much it plans to sell its shares for, with stock going on sale at $26 a pop on the New York Stock Exchange from the start of today’s trading.

In what’s billed as the biggest tech IPO since Facebook’s dismal debut on NASDAQ around 18 months ago, Twitter said it plans to sell off more than 70 million shares of its stock, starting at $26 per share – amounting to a net profit of more than $2 billion at that price. Trading is set to kick off on Thursday morning EST, with Twitter trading under the symbol TWTR. Unsurprisingly, Twitter was the first to break the news of its IPO with the following tweet:

 

Twitter’s $26 per share price tag was even more optimistic than it had initially suggested. Earlier this month, an SEC filing by Twitter said that the company was considering selling off its shares in the $23 to $25 price range, itself an increase on its initial $17 to $20 target just a month before. There’s every reason for this optimism though, as most experts believe that Twitter is unlikely to repeat the disastrous performance of Facebook when it first launched its IPO – on the contrary, an online poll of Forbes contributors and readers predicts that this price will sky rocket to $31 by the close of trading today, while a second poll estimates that this could rise even higher, to as much as $40 per share, by the end of the day.

We’ll be sure to follow Twitter’s fate here on SiliconANGLE once trading actually begins, but in the meantime, for those interested in buying, here’s three things that you might not know about the microblogging service that could well impact its fortunes:

1. Most of its users aren’t really users at all

 

Those who’ve been following this story today have probably heard a lot of talk about MAUs, or “monthly active users”, and there’s a reason for this. Twitter might be famous all over the world, but when compared to rival Facebook, it really isn’t that big at all. For starters, less than half of Twitter’s registered users are actually active on the site, following two or more people. That’s why MAUs are important for investors because they want to know how many people actually use the service on a regular basis, not just how many have signed up. In this respect, Twitter’s MAU of 215 million at the last count lags way behind Facebook, which counts an impressive 1.19 billion MAUs. Twitter even falls short of Google+, which counts some 300 million MAUs.

2. And most of these don’t live in the US

 

Surprisingly, Twitter isn’t anywhere near as popular at home as it could be. It’s thought that less than 25% of its MAUs actually live in the US, with the rest living abroad. This could have negative implications as far as monetization goes, because some 74 percent of its revenues were derived from US-based users, according to Bloomberg. On the plus side, Twitter does at least seem to appreciate this, which is why its been working on all kinds of ways to boost user growth at home – partnering with TV networks and sports leagues, integrating Twitter into set-top boxes and TV remotes, and copying the look and style of succesful social networks like Instagram and Tumblr.

3. Twitter may know even more about its users than Facebook

 

One potential bonanza for investors lies in the sheer wealth of data that Twitter possesses about its users. Admittedly Facebook knows a lot, but its disadvantage lies in the fact that it doesn’t use its “like” button to track users – whereas Twitter makes no such promises. This, together with it’s recent acquisition of mobile advertising platform MoPub, has led some experts to suggest that Twitter could become a “digital Rosetta Stone that enables it to know who you are, wherever you are,” or in other words, an absolute gold mine for advertisers.


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