Facebook’s share price skyrocketed late last month from $26 to $33 overnight, followed by steady and impressive growth throughout the next week. On Wednesday, it hit its original IPO price of $38 a share, causing everyone who bought last October at $18 to do a collective backflip and day one investors to finally stop crying. The surge was powered by a strong earnings report that showed an uptick in mobile user growth and ad revenue that was prolonged by speculation of new ad products being released. Let this serve as a lesson to all social networks: mobile usage, plus diversity of ad products and revenue streams, equals public trading success.
If you read that out loud, a Twitter employee likely jumped out from behind a bush with five credit cards in both hands, laughing like a mad man . Twitter is so mobile that sometimes I think its text looks low-res on a computer screen. Its ad revenue has grown from $288MM in 2012 to $583MM in 2013, and is projected to hit $1.3B in 2015 (according to eMarketer), and its bottom line is extremely diverse with revenue streams from television partnerships and data sales. Not to mention Twitter’s greatest strength: the fact that the world is reminded how important it is during every major sporting contest, award show, holiday and breaking news event. Twitter has changed the way the world disseminates and consumes valuable (and trivial) information. Stock prices fluctuate based on speculation, and Twitter will remind investors of its growth potential with every viral tweet.
So when people ask me why I don’t have Facebook stock, it’s not because I was too cowardly to buy at $18 a share last year (yes, it is), it’s because I’m holding out for Twitter’s IPO. Its growth and inherent mobility will make it the next Wall Street darling, and we’ll all learn about its success the same way we learn about everything these days…through Twitter.