Twitter is set for public offering this Thursday, something that we at The Practice are highly anticipating. After all, the news has been the hot topic of conversation, and the most hyped tech IPO since Facebook’s in May 2012. But is the micro-blogging site worth investing in? We weigh up the pros and cons…

Despite our enthusiasm at the news, we can’t help but worry how Twitter will fare at flotation given Facebook’s disastrous public offering last year. Without wallowing in pessimism, it’s important to note that Twitter doesn’t have the same clout of influence as Facebook does, nor revenue potential- after all, the platform has yet to turn a profit. If we look at the figures, Twitter’s 232 million active monthly users pales in comparison to Facebook’s 1.2 billion, while the platform has only generated $422 million this year to Facebook’s $5.3 billion. So far this year, Facebook’s net income has reached $977 million- a considerable success when compared to Twitter’s loss of $134 million. When it comes to mobile, the former also boasts 15.8% of the advertising market share while Twitter occupies just 1.9%, and mobile app monthly users of 874 million to Twitter’s 176.3 million. In short, Facebook is a way of life with vast sphere of influence for the digital user, while Twitter has yet to reach that status. If Facebook had a less than impressive float, just what hopes do we have for Twitter?

On the other hand, the climate is right for such a float; to date, 2013 has been the strongest year for IPOs since 2007 in the US, with more than 178 companies going public. Such has been the demand in the days leading up to Thursday’s flotation, that some funds which ordinarily do not buy IPO shares have even sought allocations of up to 10 per cent. Furthermore, Twitter closed its books yesterday due to such high interest, with share values now in the expected range of $23-25 in comparison to previous expected figures of $17-20. And unlike Facebook which dramatically raised its price range and number of shares in its IPO, Twitter has been praised for not raising the amount of offerings, for conducting the process with a more considered approach, and for clear pitches focusing on its global business future.

However, potential investors are still concerned by the forecast for Twitter’s business model. Worries have stemmed around the site’s over-reliance on advertising sales with too little focus on other revenue-generating schemes. We might add that Twitter is trying to drum up profits from the acquisition of start-ups and tech companies of which it now owns 31, but we too wonder how important these might be to the site’s future. And another worry comes just this week, after Twitter revealed in its latest IPO filing on Monday that it had received a letter from the International Business Machines Corp, stating infringement on at least three US patents. There’s no doubting that slightly higher prices than expected, coupled with flaws to its business direction and past problems make for a less than sound start to Twitter’s flotation, but is investing still a risk worth taking? We’d love to think so given the success of previous tech IPOs including Amazon, Google and LinkedIn, but of course only time will tell. Let’s see what happens tomorrow!

Do you think Twitter will have a successful public offering, with good investment potential? Or do you worry that investors might not see profits for some time? Have you invested in tech IPOs in the past, and do you plan on buying shares this time round? We’d love to hear your opinions and experiences, so please tweet to us @PracticeDigital and share your comments on our Facebook page.