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Twitter IPO stokes hot market for Internet stocks

Investors look for value in Internet companies
By MICHAEL LIEDTKE Published: October 3, 2013
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/articleid/3889243/1/pictures/2228789">Photo - FILE - This Feb. 2, 2013, file photo shows a Twitter icon on the display of a smartphone in Berlin. The company tweeted Thursday, Sept. 12, 2013, that it has ¬¨a¨confidentially submitted an S-1 to the SEC for a planned IPO.¬¨aÆ Twitter is taking advantage of federal legislation passed last year that allows companies with less than $1 billion in revenue in its last fiscal year to avoid submitting public IPO documents. (AP Photo/dpa, Soeren Stache, file) ORG XMIT: NYBZ147
FILE - This Feb. 2, 2013, file photo shows a Twitter icon on the display of a smartphone in Berlin. The company tweeted Thursday, Sept. 12, 2013, that it has ¬¨a¨confidentially submitted an S-1 to the SEC for a planned IPO.¬¨aÆ Twitter is taking advantage of federal legislation passed last year that allows companies with less than $1 billion in revenue in its last fiscal year to avoid submitting public IPO documents. (AP Photo/dpa, Soeren Stache, file) ORG XMIT: NYBZ147

Twitter hasn't set a timetable for its IPO since announcing its plans to go public in a Sept. 12 tweet. Most analysts expect the San Francisco company to complete the process in November or December.

Wall Street's current infatuation with Facebook Inc.'s social network and LinkedIn Corp.'s online professional network bodes well for Twitter. Like Facebook and LinkedIn, Twitter runs a bustling service that relies on free content posted by its users.

With about 200 million users, Twitter is the smallest of the bunch, based on the company's most recent disclosures about its size. LinkedIn has nearly 240 million users while Facebook boasts nearly 1.2 billion active users.

That gap leaves Twitter more room to grow, a prospect that typically appeals to investors.

Twitter's initial public offering will go well if it can draft off the momentum of Facebook and LinkedIn, whose stocks have more than doubled in value during the past year. The Standard & Poor's 500 index has risen 17 percent during the same period.

For LinkedIn, the gains extended a phenomenal run that began the day it went public in May 2011 at $45 per share. The Mountain View, Calif. company's stock has never fallen below its IPO price and it's now hovering around $250. LinkedIn has won over investors by fueling the belief that its service has transformed the way employers find and recruit workers. .


There is great demand right now to invest in companies that could be powering the future, but it's a window of opportunity that won't last forever.”

Colin Gillis,
BGC Financial analyst

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