On Wall Street, there is an old saying: Where are the customer's yachts? That's because when a big deal goes down, everyone gets rich -- except for the blessed brokerage customers. Either they got in too early or too late. Either way, they feel like they got screwed. That's probably because they often do.
Which leads us to the Wall Street's newest get-rich-quick scheme: the much-discussed, ballyhooed initial public offering of Twitter. Sounds great, eh? Hey, everyone, but everyone, uses Twitter. It is the face of social media, along with Facebook and linkedIn. The whole thing practically screams, Can't miss.
When someone on Wall Street tells you that an investment "can'tmiss," it's usually time to grab your wallet, run home and hide your cash in the mattress.
The Twitter IPO is being valued at $12.8 billion. Bloomberg opined: "The $12.8 billion figure is derived from the fair value that Twitter put on its shares in an initial public offering filing last week. Ironfire Capital LLC and Gamco Investors Inc. (GBL) project the San Francisco-based company could be worth $15 billion to $20 billion once it begins trading.
"Those targets are fueled by the firms’ expectations that Twitter can increase revenue at a rapid clip, as it expands globally and draws advertising dollars from companies seeking access to its more than 200 million monthly active users. Twitter has more than doubled revenue annually as companies advertise on the service, the filing showed For more, see: http://www.bloomberg.com/news/2013-10-07/twitter-s-valuation-seen-exceeding-20-billion-after-ipo.htm....
Of course, this might send familiar to you. Remember the media's hysterical build-up to the Facebook IPO last year? Facebook also wore that can't-miss sheen all the way through its roadshow, when people obsessed about CEO Mark Zuckerberg's trademark hoodie, to the big day, on May 18.2012. Priced at a hefty $38, Facebook promptly sank like a rock and was a poster child for grossly disappointing IPOs thereafter.
Twitter's greatest appeal may be in its image as a great symbol of the exploding social media. Everyone loves Twitter. Its use has grown over the years, too.
I learned of the capture of Osama bin Laden on Twitter, and monitored it closely both on Election Night last year and during the Boston Marathon tragedy to keep track of what was going on.This is a remarkable testament to a communications service that is fulfilling its promise to peopleall over the world.
But do these good vibes make Twitter look like a sterling investment for Main Street?
Twitter could well wind up disappointing investors everywhere, just like Facebook did.
But if it doesn't, Twitter will probably spark an explosion in social-media IPOs. When that happense, do me a favor, OK? Take me for a ride on your yacht.