On November 2013, Twitter went public through a successful IPO, selling 70M shares at 26 dollars per piece. However, that was below the public expectation as the public was only willing to pay $45.10 a share for the very first trade, valuing Twitter about $25B.
Twitter has not fulfilled its promise since then as hopes of rapid growth repeated vanished. The company decided on focusing on other metrics in response to that, and revenues jumped impressively to $436M in 2015’s first quarter from the $169M on 2013’s third quarter, a 160% increase within 18 months.
However, expenses grew even more, resulting in quarterly losses. Twitter lost $162M in the recent quarter, not a good indicator for the company. Over time, public companies really rise and fall, but public companies should be different as the management addresses the board that has been elected by its shareholders. Thus, shareholders would always want an increasing share price.
The company stocks should also need to show growth, but the social ecosystem is decreasing in value. Jenna Wortham diagnosed a turning point last year, saying that the use of Twitter has lessened and has become less exciting. Over and above, it could not be resolved by another management reshuffle.
Instead, experts say the solution is acquisition. Twitter must be bought by Facebook, considering the fate of WhatsApp and Instagram when FB acquired them, never faced revenue pressures and kinds of scrutiny, although FB might change if it acquires Twitter.