Twitter IPO Speculation Picks Up Feverishly, and How To Play It

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Twitter is going to be the next big social media IPO. At least that is what the news flow measurement is suggesting. While we have seen increased speculation that Twitter is readying to start its IPO process, the reality is that it now only seems like a severe adverse event or a major market correction will derail an IPO from Twitter.

Many changes have taken place in the company, including in its ranks of insiders. Its general counsel has reportedly left, but the larger move made by the company is that Twitter hired Ticketmaster's former CEO to lead its online commerce initiatives.

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If everything comes out as expected, Twitter would be worth north of $10 billion at the time of its IPO. Some estimates are even for a $15 billion valuation. Be advised that LinkedIn Corp. (LNKD) is worth almost $28 billion in market value, while Facebook Inc. (FB) is worth some $108 billion in market value. GSV Capital Corp. (GSVC) is one of the hidden beneficiaries of a Twitter IPO and its shares have been acting as though this development is much sooner rather than farther away.

We have collected what may be a montage of Twitter articles that are pointing to an initial public offering. We first expected Twitter to come public as early as 2012, but developments got in the way of that from taking place. If history is any barometer, chances are high that all of this attention is the precursor of a formal Twitter IPO filing with the SEC.

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GSV Capital Corp. (GSVC) may be proving that Twitter is soon to be coming public as its shares hit a new 52-week high of $14.43 on Monday. This public entity remains of interest in the closed-end business development companies because Twitter is in its portfolio. GSV also is an earlier investor in Twitter and it was also an investor in Facebook Inc. (FB) and other social media and new internet companies. With shares around $13.95, the 52-week trading range is $6.84 to $14.43. The company had invested some $37 million or so to buy Twitter shares. GSV recently placed a valuation of about $10.5 billion on Twitter.

Twitter is one of the few 17 Hottest IPOs of 2012 that we expected to come to market which has not made it to market. As noted above, here are other major articles pointing toward a Twitter IPO.

  • The San Francisco Chronicle has a recent article called "Signs that Twitter may be preparing for an IPO" discussing its prospects.
  • Fox Business even has a video showing that the company has responded, sort of, to the IPO question.
  • Investors Business Daily reported that a Twitter IPO would likely avoid the mishaps of Facebook and Google.
  • The Motley Fool even showed how to make money off the twitter IPO before it comes public.
  • Bloomberg recently highlighted that Twitter's CFO is reaching out to investment banks.

One last way to play the impact from a Twitter IPO would be in the Global X Social Media Index ETF (SOCL). This holds shares of Facebook and other social media powerhouses. Unfortunately, it will not hold Twitter shares directly at the IPO as it is an ETF.

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Again, when there is this much chatter from major and well known media outlets we would generally consider an IPO filing to be coming very shortly.

@JonOgg

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