I won a bet today with a friend. I said that we would get at least one social media company that went public this year. It was an easy bet to win. Many of these social media companies, Facebook, Twitter, being the two big ones had been in the news for over a year with plans on going public. But today, LinkedIn, was the 1st to pull the trigger. I’m on all 3 sites (as a PR student it is quite necessary) and use them almost everyday, so I I’ll tell you what I think of all 3 of them as focus on Facebook and Twitter my views on them having an IPO (initial public offering or simply being listed on the stock market) in the future.
LinkedIn is an interesting case. Of the 3, it is the most professional and I appreciate that aspect. Apparently so do a lot of my peers. The past couple months it seemed every week, I have been adding old colleagues at a feverish pace, to keep in touch with them all on LinkedIn. Besides this though, I haven’t used or rather dived into LinkedIn as much as I’ve liked to…yet. But it’s use is evident. It is a networking tool, with a global network, a key point in this new reality of economies being so closely tied together with each other more than ever.
I have heard that their groups, which I am a part of about 10 related to PR/communication, really makes LinkedIn a valuable source in organizing people for business development discussion. This is definitely something I want to explore more. When I put my investor hat on and seeing how LinkedIn quickly doubled from its IPO price of $45 to an intraday high of over $122/share, to a close of a healthy $94.25 with over 30 million volume, this is positive news for their company. Obviously it won’t do 30 million everyday but impressive nonetheless and good on them for this amount of initial support for their target valuation.
Facebook is a different story. Their IPO will no doubt be a top news item, but I’ve grown rather tired of Facebook, as a company, to be honest. Two big reasons are one being the growth of spam on that site, and two the messaging system or Facebook chat.
Spam has gotten so bad I find myself filtering so many people, this filtered list is becoming the same size of my hundreds of friends. The messaging system, Facebook chat is a mess. It is that simple. Throw in the recent bad press of Facebook using world renowned PR firm Burston-Mueller to smear Google’s reputation, and you really see that maybe the movie “The Social Network” really wasn’t that far off in portraying the company. Not helping my career or other PR professionals when we have to deal with being labelled “spin doctors”, as the profession is so commonly wrongly described. All of these types of "soft feelings” I’ll call them, because they pull on my emotional attachment in regards to Facebook. Throw in their just insane valuation (roughly 70 billion market value) and I would have a hard time, going for this in an IPO situation.
Twitter I like a lot more. It has half as many people on its site (300 million) as of today that Facebook has. (Yes it was big day for social media if you’re following). It has become the most efficient way to break news, as evidenced by the story of a journalist Pakistan directly or indirectly breaking the news of the U.S. Navy Seals Team Six killing of Osama Bin Laden. It’s fun as well. Some of the people I follow strictly use it to ply their comedic antics and this is accepted and adds to Twitter’s fun factor.
Personal views are encouraged, which makes for great back in forth between celebrities, media personalities, and just regular people like you and I. Twitter has a broad appeal, in both professional and personal use, making it a great blend, more so than LinkedIn which is more purely professional and Facebook which is more purely personal. This makes it a more attractive target for me if I were to pursue it in an IPO.
Being in the field of PR, it is exciting to see how social media is growing and impacting everyone. In terms of these companies. whether they become sustained profitable entities, without the fear of them imploding is anyone’s guess. I would rather invest, as I have done so, in hard assets (gold), dividend funds, and equities. Of course, those that made a quick double and then some on LinkedIn today would argue to the contrary. However, herein lies an obvious, although key point. Regardless of whether my predictions are right or wrong, for both my stocks I’m invested in or those that invested in LinkedIn today, you only make as much money in investing as the amount you of money you put on the line. As was proven today, with the 30 million shares traded, this has occurred in such an impressive manner, which LinkedIn hopes is just the start of great things to come for them as a company.