Today is Twitter's big coming out day, and things seem to be off to a great start with shares selling for about $46 a pop and the company being valued at about $33 billion as of now. Feel like your missing out by not buying into any shares? Well, the Wall Street Journal has some good points as to why you should just live your life as normal today, and not worry about TWTR.
First off, unless you've done this before, you probably don't know what you're doing. And by throwing yourself in an arena with a ton of analysts who have been preparing for this day for weeks, if not months, you'll only be fighting a losing battle. People are getting caught up in all the hype over Twitter right now, since so many people use it and it's such a popular network, but before today, the company has had zero profit. It's an exciting time, but there is no guarantee that Twitter will actually succeed. Investing during a tech IPO takes a lot of strategy, and it's possible that investing a ton of money while a company appears to be doing good could leave you broke in just a few months when things go bottoms up. If Twitter is going to be successful, then let it become successful and invest when all the hype settles.
Second, Twitter is still a changing company. It's grown a lot since its founding, and looks completely different from what it did so long ago. Seriously. The 140 characters and the hashtags are pretty much its last signatures (even though Facebook and Tumblr have already adopted using hashtags of their own.) But even hashtags and @ replies were invested by its users, and not the company itself. Twitter, probably because of its simplicity, is a fluid company. Even today, it released a new "hashtag" that uses the $TWTR symbol instead of a #, just for the IPO. Twitter still, in a way, has the feel of a fresh startup, in the sense that it's still experimenting. But when it comes to investing your money, the perspective backflips, and instead of the company being fun and fluid, it's unstable and lacking vision.
Lastly, just like Google and Facebook before it, Twitter needs to get its advertising gameplan in check. The Promoted Tweet has worked well so far, but it needs something more; and with that, something that won't drive users away. It's a hard balance to find, and it's one that Twitter is still playing on the scales with. Also, they're still not sure if Promoted Tweets are doing anything. Are they influencing people to buy the company's products? If not, when advertisers become aware of this, will they fly the Twitter coup and flock somewhere else?
These are just some of the risks that come with throwing your money at a tech company that isn't the first or last to have an unpredictable future ahead of it. If you're sitting back home, reading this, don't feel like you're missing out. You're exactly where you should be.
[via Wall Street Journal]