In a little over a week, Twitter's first public offering on the New York Stock Exchange will begin -- but before anyone thinks this is the next high-tech stock heading toward the stratosphere, experts have a few words of caution.
Interest is certainly piqued. In fact, the NYSE even ran a dry run over the weekend to make sure everything goes off without a hitch because Twitter's valuation is expected to be in the neighborhood of $12 billion. That said, experts say anyone looking to make a quick killing should probably look elsewhere.
As far as Twitter is concerned, anyone with their head down, gazing at their phone while scrolling through a list of tweets is not a customer. Rather, users are a product sold to advertisers.
"They finally added sponsored tweets," said Austin Roos, who added that he expected the advertisement and isn't bothered by it. "They've done a good job, adding stuff that doesn't stand out in your feed."
Twitter's 232 million active users worldwide create an estimated 6,000 tweets per second, but when the public offering comes, Wall Street will want to know how Twitter can turn those impressive numbers into cash.
"They haven't done enough," Jason Douglas opined. "The advertising model isn't sustainable."
Douglas is an expert in social media marketing, and he said Twitter still has some work to do unless they want to follow the same road as Facebook and face another overpriced, poorly executed flop -- and at least Facebook was making money at the time.
According to Twitter's balance sheet, revenue is expected to total $422 million, but costs are projected at $548 million -- putting the company $126 million in the red.
Investment Manager John Feste believes Twitter's stock will be priced right at between $17 and $20 a share, but he cautions that for each top-dollar tech stock that hits a home run -- like Google and Apple -- there's another -- like Pandora or Facebook -- that failed to live up to the hype.
"It needs to mature a bit, the market needs to figure out the true value, which will occur over a period of time," Feste said.
Twitter has also gotten roughed up I the press in the last couple of weeks. A New York Times profile of one if its founders, Jack Dorsey, quoted a former Twitter employee saying, "The greatest product Jack Dorsey ever made is Jack Dorsey."
Anyone who wants specific details on the IPO can take a peek at the 164-page Twitter prospectus, in which Twitter lays out all its dirty laundry for anyone who is considering investing some serious money to see.