Wall-Street and its investment banks are beating their drums on the next big thing. The Twitter (TWTR) IPO is here and it’s consuming a lopsided amount of the financial media airwaves. The investment banks are looking for a rebound stock after the highly anticipated botched Facebook (FB) IPO. After being approached so many times about my opinion of the Twitter IPO I decided to write a short article to rationalize my thoughts.
Some of the people that have approached me are regular people with limited knowledge of the investment world. They have been caught up in the Twitter hype believing they will get rich. When they ask for my opinion I tell them that I like Twitter as a company and that I have an account but it’s not investment worthy. Then they get defensive. They tell me that since the financial media spends most of its time talking about Twitter it’s obviously a guaranteed winner. I will address the financial media issue in more detail below. It’s important to specify that a good company does not necessarily guarantee that it will be an excellent investment. A great investment is when you buy an asset below its intrinsic value and sell it above it. That’s how you make money in investing. The rest is speculation, which is a game that I don’t play because I hate losing money. The point of the article is to educate readers and to approach Twitter with caution.
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