Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News
      South Africa's ATM network faces its biggest overhaul in decades

      South Africa’s ATM network faces its biggest overhaul in decades

      16 October 2026
      The R77 000 iPhone has arrived in South Africa

      The R77 000 iPhone has arrived in South Africa

      16 October 2026
      Africa's mobile operators pay more for less spectrum, GSMA says

      Africa’s mobile operators pay more for less spectrum, GSMA says

      16 October 2026
      Netflix is losing the battle for your screen time

      Netflix is losing the battle for your screen time

      16 October 2026
      Safaricom control to stay with Vodacom until appeal

      Safaricom control to stay with Vodacom until appeal

      16 October 2026
    • World
      AI is now holding up the world economy, says IMF

      AI is now propping up the world economy, says IMF

      12 October 2026
      SpaceX takes aim at US wireless carriers with spectrum acquisition

      Starlink is coming for your mobile operator

      9 October 2026
      The AI PC is finally here. It's just very expensive - Jensen Huang, Satya Nadella

      The AI PC is finally here. It’s just very expensive

      8 October 2026
      The memory crunch is making Samsung fabulously rich

      The memory crunch is making Samsung fabulously rich

      8 October 2026
      SpaceX to borrow $40-billion to buy Nvidia chips

      SpaceX to borrow $40-billion to buy Nvidia chips

      7 October 2026
    • In-depth

      10 days that changed the course of AI

      21 September 2026
      Meta to the AI industry: slow down without us - Mark Zuckerberg

      Meta to the AI industry: slow down without us

      16 September 2026
      Google DeepMind CEO Demis Hassabis. Image: John Sears

      The plan to stop AI from breaking the world

      16 July 2026
      The internet has a Strait of Hormuz problem

      The internet has a Strait of Hormuz problem

      15 July 2026
      AI boom sparks rally, frenzy and fear

      AI boom sparks rally, frenzy and fear

      11 June 2026
    • TCS
      W&W | LDV's Gerhard Moolman on electric bakkies, fleet orders and 'school fees'

      W&W | LDV’s Gerhard Moolman on electric bakkies and fleets

      9 October 2026
      TCS | Frogfoot sees bigger fibre deals coming - TechCentral Show guests Abraham van der Merwe and Shane Chorley

      TCS | Frogfoot sees bigger fibre deals coming

      8 October 2026
      Meet the CIO | Vodacom's Mohamed Sami on the agentic future

      Meet the CIO | Vodacom’s Mohamed Sami on the agentic future

      5 October 2026
      Lexi Novitske, general partner at Norrsken22, on the TechCentral Show

      TCS | Norrsken22’s Lexi Novitske on how China is winning African tech

      1 October 2026
      TCS | Dominic White and Adam Ely on AI agents going rogue

      TCS | Dominic White and Adam Ely on AI agents going rogue

      29 September 2026
    • Opinion
      When a machine can choose, who does it become? Fanie van Rooyen

      When a machine can choose, who does it become?

      9 October 2026
      Let South Africans jailbreak their way to digital sovereignty - Dirk de Vos

      Let South Africans jailbreak their way to digital sovereignty

      5 October 2026
      South Africa's next energy crisis is in the accounts department - Craig Holmes

      South Africa’s next energy crisis is in the accounts department

      29 September 2026
      The steam engine lesson AI doomsayers keep missing - Sam Clarke

      The steam engine lesson AI doomsayers keep missing

      28 September 2026
      Let South Africans jailbreak their way to digital sovereignty - Dirk de Vos

      Regulating AI: apply the laws we have first

      21 September 2026
    • Company News
      • 1Stream
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • Ascent Technology
      • AvertITD
      • BBD
      • Braintree
      • CallMiner
      • CambriLearn
      • CM.com
      • Contactable
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • HOSTAFRICA
      • Incredible Business
      • iONLINE
      • IQbusiness
      • Iris Network Systems
      • Kaspersky
      • LSD Open
      • Mitel
      • NEC XON
      • Netstar
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Publishared
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Telviva
      • Tenable
      • Vertiv
      • Videri Digital
      • Vodacom Business
      • Vox
      • Wipro
      • Workday
      • XLink
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Financial services
      • HealthTech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Policy and regulation
      • Public sector
      • Retail and e-commerce
      • Satellite communications
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
      • Watts & Wheels
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Editor's pick » This bird is set for take-off

    This bird is set for take-off

    By Editor7 November 2013
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    Get breaking news on WhatsApp

    Roy-Topol-180Twitter has to be one of the more interesting modern-day concepts: a platform where people from all over the world can share ideas, thoughts and breaking news in bite-sized portions of up to 140 characters.

    Apart from being a means for celebrities to interact with their followers, it is also used extensively by journalists, politicians, intellectuals and investment professionals to share their views and be challenged on them.

    There is no doubting its impact on society and our lives, so it comes as no surprise that the interest in its listing (or, to use the US term, its initial public offering or IPO) is reaching fever pitch. Twitter is looking to raise US$1,7bn in capital on a valuation of around $17bn.

    It is arguably the most interesting IPO of the year and certainly the most exciting IT listing since Facebook in 2012. Twitter, which is much smaller than Facebook, will be sure to learn from Facebook’s IPO flop: it was one of the few high-profile listings where the share traded below its IPO price (and stayed there for more than a year). Facebook and its bankers, Morgan Stanley, were heavily criticised for the way the IPO was handled.

    Because of this, Twitter has already decided to list on the New York Stock Exchange, which could be construed as a slap in the face of the Nasdaq, the US exchange that has become synonymous with technology companies. The issues that Facebook shareholders had to endure during its IPO seem to have encouraged Twitter to opt for the Nasdaq’s older, more traditional competitor.

    Another interesting choice has been to have Goldman Sachs as the underwriter and lead book builder for the listing. Many in the investment community blame Morgan Stanley, the underwriter and lead book builder for the Facebook IPO, for hyping its price up a couple of times before listing (due to rampant demand), leaving very little on the table for others. Let’s hope Twitter’s listing will be more professionally handled and the usual IPO “pop” happens.

    But when it comes to valuation, Twitter does look rather expensive. It is listing on more than 25 times revenue and more than 10 times forward revenue, with no history of profit in its short, seven-year history. Even if you forecast profits to be $500m in two years (possible, but not likely), it is still a rather steamy 20 times its two-year forward earnings.

    However, the power of Twitter and its growth has been staggering. At the end of September, it had almost 232m active users who generate more than 500m tweets a day. This is up from 30m users in March 2010 (see graph below). The revenue growth has been even more staggering. From a revenue base of $28m in 2010, it generated revenue of $422m for the nine months to September 2013. Some analysts have forecast revenue to top $1bn for the full year next year as it starts to monetise its platform through various advertising campaigns.

    Twitter users

    The really staggering thing is that Twitter is probably still in the infancy stage of its growth story. Pew Research estimates that 18% of US adults use Twitter, up from 8% three years ago, but still well below the 72% who use all social networking sites. Outside of the US, the growth potential is even greater. Twitter states in the prospectus that “in the future we expect our user growth rate in certain international markets, such as Argentina, France, Japan, Russia, Saudi Arabia and South Africa, to continue to be higher than our user growth rate in the US”. South Africa is mentioned despite doubling its users in the last year.

    Although it is difficult to forecast a sustainable growth rate, the one thing Twitter does have on its side is a business model that is it is scaleable — the infrastructure that Twitter is built on does not require massive capital to grow. Revenue is almost all sourced from advertising and if revenue can grow at 30%/year for a number of years and it can contain costs, Twitter could be a very profitable company. Furthermore, while Twitter does seem expensive in absolute terms, relative to other social media companies it does look attractive:

    [table id=52 /]

    Moving beyond the financials, Twitter is more than just an IT company looking to raise capital. It is very much a revolutionary concept. Like the PC in the 1980s and the Web in 1990s, social media is the next step in the ever-evolving digital and information age.

    Twitter, in its short existence, has already shown its power to extend boundaries, both economic and political. The upheaval in the Arab Spring was in part facilitated by Twitter’s ability to disseminate information quickly and broadly and draw large hordes of like-minded people to rise up together. History may attribute to Twitter the role of a significant contributor to facilitating the breaking down of barriers in society and promoting globalisation.

    If you look at the sustainability of its business model, it also looks more attractive than some of its peers. Twitter is more than just a photo-sharing application between social circles; it is a way of sourcing news and information and finding interesting people to follow. It is unique in its ability to disseminate information quickly and is used extensively as a valuable medium of communication.

    As usual with internet IPOs though, determining the right price is the difficult thing. But there is one thing that is sure to happen when Twitter when it lists later on Thursday: #TwitterIPO will be trending.

    • Roy Topol is investment manager at Investec Wealth & Investment
    Add TechCentral as a preferred source on GoogleFollow TechCentral on Google NewsGet breaking news on WhatsApp


    Facebook LinkedIn Roy Topol Twitter
    WhatsApp YouTube
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleCell C chops international rates
    Next Article SA man attempts to break call record

    Related Posts

    B2B buyers pick a winner long before the pitch - Publishared, Michelle Losco

    B2B buyers pick a winner long before the pitch

    1 October 2026
    Meta's new AI agent can spend your money on your behalf - Mark Zuckerberg

    Meta’s new AI agent can spend your money on your behalf

    9 September 2026
    Meta wins by settling

    Meta wins by settling

    27 August 2026
    Company News
    Paratus Zambia delivers Starlink to thousands of children in Family Legacy schools

    Paratus Zambia delivers Starlink to thousands of children in Family Legacy schools

    15 October 2026
    Data sovereignty in South Africa is not an address - Ascent Technology, Johan Lamberts

    Data sovereignty in South Africa is not an address

    15 October 2026
    AI is only as good as your asset data

    AI is only as good as your asset data

    14 October 2026
    Opinion
    When a machine can choose, who does it become? Fanie van Rooyen

    When a machine can choose, who does it become?

    9 October 2026
    Let South Africans jailbreak their way to digital sovereignty - Dirk de Vos

    Let South Africans jailbreak their way to digital sovereignty

    5 October 2026
    South Africa's next energy crisis is in the accounts department - Craig Holmes

    South Africa’s next energy crisis is in the accounts department

    29 September 2026

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Latest Posts
    South Africa's ATM network faces its biggest overhaul in decades

    South Africa’s ATM network faces its biggest overhaul in decades

    16 October 2026
    The R77 000 iPhone has arrived in South Africa

    The R77 000 iPhone has arrived in South Africa

    16 October 2026
    Africa's mobile operators pay more for less spectrum, GSMA says

    Africa’s mobile operators pay more for less spectrum, GSMA says

    16 October 2026
    Netflix is losing the battle for your screen time

    Netflix is losing the battle for your screen time

    16 October 2026
    © 2009 - 2026 NewsCentral Media
    Built and maintained by Chronon
    • Cookie policy (ZA)
    • TechCentral – privacy and Popia

    Type above and press Enter to search. Press Esc to cancel.

    Manage consent

    TechCentral uses cookies to enhance its offerings. Consenting to these technologies allows us to serve you better. Not consenting or withdrawing consent may adversely affect certain features and functions of the website.

    Functional Always active
    The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
    Preferences
    The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
    Statistics
    The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
    Marketing
    The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
    • Manage options
    • Manage services
    • Manage {vendor_count} vendors
    • Read more about these purposes
    View preferences
    • {title}
    • {title}
    • {title}
    🇿🇦 Sign up to the TechCentral newsletter