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Perspective: Twitter's success opens up IPO pipeline

Sharon Gaudin | Nov. 22, 2013
Wall Street, social networks sit up and pay attention as Twitter turns market around

The IPO pipeline is opening up, and companies that had been holding back and waiting for the Facebook cloud to pass appear more willing to make the move. However, we're not likely to see an IPO free-for-all. There's still a segment of the population, mostly the older generation, that has not been so quick to take to social media and might not see the benefits — either socially or as an investment.

To attract investors, social networks, and the broader base of tech companies in general, need to make sure they're not one-trick ponies, and that they can offer something inventive, maintain an engaged user base, and drive traffic and revenue.

Becoming a household name, like Twitter, doesn't hurt, either.
Analysts agree that the prospects for social media companies in the stock market are more hopeful. But whether that enthusiasm can be sustained as more companies join the fray is yet to be seen.

"Twitter wasn't based on financial fundamentals but hopes and wishes," said Rob Enderle, an analyst at Enderle Group. "Yet it created a feeding frenzy for these stocks.... The market appears ready for more."

 

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