Twitter’s IPO: A Financial Perspective on Social Media

I feel as if twitter is like that friend of yours that seems to know everyone and how they all know each other. When it comes to twitters influence on the online and business worlds it can be considered essential and irrelevant in the same step; but as it stands right now the demand is high and perception of the platform is well maintained but at the end of the day its where the users are most engaged and twitter as done a great job at capturing its audience’s attention, such as the “click and hold” action perfected by http://www.snapchat.com/.

Puella Ludens

twitterFor the past several decades, the stock market and the financial world seem to be increasingly abstracted from “the real world.” The epic housing bubble and economic downfall of the 2000’s are just a few obvious manifestations of this phenomenon. My rough understanding of how any valuation should work is based on my experience of everyday consumerism, paying for basic products whose cost is based roughly on the cost of production and a bit of added expense for the psychological value of an object based on brand and commercial image.

Obviously, the wild world of valuation on the stock market is a much different kind of enterprise. I was struck by this anew when considering Twitter’s IPO last week, and how this flurry of financial activity relates to our understanding or lack thereof about the “value” of social media.

I first became curious when I read that Twitter stock prices…

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