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CCTV Script 7/11/2013

— This is the script of CNBC's news report for China's CCTV on November 7, Thursday.

Welcome to the CNBC Business Daily.

After months of anticipation, tech wunderkind Twitter will debut today at $26 a share.

The initial public offering values Twitter at $14 billion dollars and could potentially raise $1.8 billion for the social media network - not bad for a company that has yet to turn a profit.

So just how will Twitter deliver on its promise of an advertising revolution? CNBC's Julia Boorstin has all the details:

[Package on tape by CNBC Tech Reporter Julia Boorstin]

The fact that Twitter's core business is ads means potential to sell stuff not just when users shop later, but right in the moment on Twitter. In August, Twitter hired former TicketMaster CEO Nathan Hubbard as its first ever Head of Commerce. Twitter could use information about users' location and interests to offer products or deals.

The big league will come when Twitter allows users to link their credit card to their account, for one click purchases within Twitter. You could say, order a pizza from Papa John's or donate to, say, the Red Cross. Twitter could take a cut from those transactions. This would allow hotels to offer empty rooms, concerts to sell last minute tickets, or restaurants to fill tables.

This would be a streamlined version of Twitter and AMEX's current sync partnership which links credit cards to Twitter profiles, enabling people to tweet to purchase. Twitter could also partner with companies like eBay, Etsy or Amazon to link accounts to enable purchases without inputting new credit card information.

But commerce isn't the only way we can expect Twitter to branch out and grow its business. Many say Twitter will start earning more from licensing its data, but the easiest way the company can ramp up revenue is overseas. Three quarters of Twitter's traffic was international in the third quarter, but that only generated about a quarter of the company's revenue.

Twitter's purchase of mobile focused ad exchange MoPub in September also points to future growth. It'll allow Twitter to improve its own ads with real time bidding and improved targetting, while it also grows revenue for MoPub's separate business of serving ads across the mobile app. Back over to you.

CNBC's Julia Boorstin there on Twitter's business plans. So is Twitter all puff and no profit? Here's what the analysts had to say:

[Soundbyte on tape by Brian Hamilton, Chairman of Sageworks]

If you look at this IPO, here's the real problem with it. It's all value, value, value. They've got revenue, they've got a good base, there's promise to the company, but they're trying to extract all that value at the IPO. Now, if all the institutional guys buy the stock, it's going to be now problem. The problem is when that stock gets dumped on the public.

[Soundbyte on tape by Robert Peck, MD & Internet Analyst, SunTrust Robinson Humphrey]

We're hearing very good things in their trends and you actually saw that in their amended S1, where ad revenues actually accelerated to almost 125% of revenue year-on-year growth. So based on our model, we got about $2 billion of revenues in 2015. Now high flyers in the internet space typically trade between 15-20 times revenue, so you put a 17x multiple on that, that got you to our $50 target.

[Soundbyte on tape by Scott Kessler, Head of

There's a tremendous amount of growth opportunities that Twitter has and we're actually not disavowing those. The problem that we see is that there's a considerable amount of investment risks and valuation concerns that we think are important as people consider Twitter in a pre-IPO and post-IPO context. Most obviously, we see significant decceleration in user growth, we see some indications that engagement is actually slowing down - we actually saw a decline in Q3 in terms of timeline views per user. And overall there's a lot of questions as Twitter looks to prove out its advertising model.

[Soundbyte on tape by Brian Hamilton, Chairman of Sageworks]

The IPO market's been very frothy. I expect the offering to do well, because here's what they've done that Facebook did not do. It doesn't help the public, but they're smart. They're not selling as many shares, they're not raising as much money. They're kind of controlling supply, so I think they'll do okay. They've lost $133 mn year to date, they're going to lose $150 mn this year. How do we get a $14 bn valuation from a company that's lost $150 mn? The math just doesn't make sense.

Li Sixuan from CNBC's headquarters

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