“We know there are some people who are social and want to talk all the time, but you can’t make a business model on those people.”
Chiagouris added that “large corporations with hundreds of millions of dollars have not put substantial sums into paid media with Facebook and Twitter.”
“They all are experimenting but nobody is putting 25 percent in social media. It may not sound cool but traditional media is still the media of choice today,” he said.
Twitter offered 70 million shares trading under the symbol TWTR, generating $1.82 billion, and gave underwriters a 30-day option to purchase an additional 10.5 million shares.
The IPO assigned a market value of around $14.4 billion to the company whose messaging service has become a hugely popular tool for celebrities, journalists, political leaders and others. But by the end of the day, that value had topped $24 billion.
With the over-allotment it should be the second-biggest tech IPO after Facebook’s $16 billion effort last year and ahead of Google’s 2004 offer, which raised $1.92 billion, according to research firm Dealogic.
Depending on the outcome of the common stock offer to underwriters, between 12.8 and 14.5 percent of the company’s shares will be publicly traded. The rest are held by its founders and a handful of early investors.
Twitter has fast become engrained in popular culture but must still convince investors of its business model, having lost more than $440 million since 2010.
But with 232 million users and growing, Twitter is expected to be able to reach profitability by delivering ads in the form of promoted tweets, and from its data analytics.
The research firm eMarketer estimates Twitter will bring in $582.8 million in global ad revenue this year, and nearly $1 billion in 2014.
