Twitter is set to launch its IPO on November 15, the company updated its filing, revealing some interesting new information about Twitter. We thought it would be fun to compare Twitter’s data with our own numbers to put some perspective on both opportunities coming up for investors. One thing to note is that after Twitter files its IPO it will be a public company that can sell shares on the open market to any investor whereas DashBurst is still a privately held entity which, although it can now publicly announce a general solicitation, by law it can still only deal with accredited private investors. Regardless, an investment is an investment, whether it’s a blue chip or penny stock, and the success is measured by the relative gains of the company going forward and not the company’s actual size at the time of purchase.
Twitter vs. DashBurst
Twitter is one of the top 11 websites in internet traffic according to the Alexa web traffic rankings, which ranks DashBurst in the top 10,000 out of the millions of sites indexed online. With all this traffic, Twitter racked up $218 million in advertising revenue in Q3, which is about $218 million more than we gathered.
Where things start to get interesting is here: Twitter is set to lose $64.6 million this quarter, with an accumulated loss of nearly $483 million total, while we’ve invested nearly $130,000 to date in building our technology. Twitter also has a ridiculous expense budget topping out at $235 million for paying its 2,300 employees and more. Although it’s difficult to make a direct comparison at this stage given the lack of financial information available about Twitter’s early economics, the network was estimated to have lost nearly $70 million in 2010, a pace that has only intensified by almost 400% recently. On the other hand, DashBurst operates on a much leaner model in hopes of sustainability.
As an investor, which opportunity would interest you more? Owning blue chip stocks are nice and are often considered a safer bet, but once stocks go public much of the fortune has already been made. For example, when Twitter officially hits the streets it will already be evaluated at nearly $20 billion, meaning you would need to spend roughly $1 billion to acquire 5% of the company. Startups, on the other hand, generally offer higher risks and rewards since they allow earlier seed stage investment opportunities, long before the public has access. This means investing in startups allows you to get in before the revenue potentially takes off at much cheaper entry points.