Twitter, an #IPOsuccess story!

In recent weeks, news of the Twitter IPO, one of the largest in tech history, has dominated global headlines.  Many of the stories focused on the imminent wealth of the founders and early investors, some touched on the under-valuation put forth by underwriter Goldman Sachs, and many compared the success of the IPO to the Facebook IPO, 18 months earlier. Using the Meltwater News service, we pulled together a retrospective media analysis on the two IPO’s across 220,000 news sources globally; with this data we were able to draw some interesting comparisons between two of Silicon Valley’s biggest ever IPOs.

Leading into an IPO is a tricky time as PR pros as they enter and exit various “quiet periods.” A quiet period essentially protects Wall Street from a company “priming the pump,” or overhyping their IPO. During the quiet period the SEC governs the publicity of a filed company to ensure a company’s press is more or less business as usual. As you can imagine it’s a tense time for a PR team, every piece of press is scrutinized and carefully evaluated. With that said, so long as the company takes on a “business as usual” approach to press, things generally turn out just fine.

Comparisons between the social media giants approach to Wall Street had been brewing for months prior to Twitter ringing the opening bell. With the market nervous after Facebook’s very public, and very underwhelming, IPO in May 2012, Twitter was quick to differentiate itself.

First by abandoning initial plans to list on the NASDAQ in favor of the larger, and seemingly more stable New York Stock Exchange, home of other tech giants LinkedIn and Yelp.

And second by controlling media relations. It appears Twitter learned a few lessons from the media hype surrounding Facebook at the time of listing, adopting a more powerful pre-listing media strategy and let the market and the share price do the talking post-IPO.

Volume of PR: Twitter IPO vs. Facebook IPO

  • Listing -5 days: In the five business days leading up to the respective IPO’s, Twitter amassed a whopping 134,560 articles about their pending NYSE listing, compared to the 102,842 in the lead up to Facebook’s IPO.
  • Listing day: Twitter again took the big news day crown, with 49,897 articles compared to the 42,353 articles Facebook earned on IPO day. As an aside, when focusing only on US media, Twitter’s IPO was mentioned in 11.5% of all US news stories published that day, whereas Facebook’s penetration only ran as deep as 8% of all US media.
  • Listing +5 days: In the five business days following listing, Facebook dwarfed the media coverage acquired by its 140-character compatriot, with 128,793 mentions compared to Twitter’s 118,739, but it is the tonality of these mentions which defines the media landscape between the two events, and goes a long way to give context to Twitter’s strategy around their NYSE debut.
Twitter IPO media coverage vs. Facebook IPO media coverage

Tone/Sentiment of PR: Twitter vs. Facebook IPO

Looking at the tone of the articles surrounding the Facebook IPO, we saw generally positive articles leading up to the IPO. Expectations were high, the LinkedIn IPO only a year earlier had been a roaring success and Mark Zuckerberg and Co. were media darlings. In the days following however, as a result of a bungled listing, NASDAQ glitches and a plummeting share price, the sentiment of the articles was 60% more negative than in the days leading up to the IPO.

Amidst this very public backlash, news of Twitter’s IPO was met with a degree of trepidation. With plenty of convincing to be done, Twitter cleverly focused on non-financial/IPO focused PR. For example, coverage highlighted the most popular performances from awards ceremonies, fan activity on NBA Opening night, and of course, 2013 Election Day was another milestone, marking the one-year anniversary of Twitter’s biggest ever day, the re-election of Barack Obama.

Starting with the exact same sentiment rating Facebook had left behind, Twitter’s coverage volume rose steadily over the weeks on either side of the IPO. Articles written after the IPO were 30% more positive in tone than those written before the listing. Thankfully for Jack Dorsey and the Twitterati, there were no botched systems within the NYSE, and despite some further criticism regarding the initial pricing (shares were listed at $26, yet opened at $45.10), most of the news was largely related to Twitter’s stable share price, and it was business as usual from there on out.

After the relative success of the Twitter IPO, other tech companies thinking of going public must be breathing a sigh of relief. Twitter appear to have given the market a generally positive outlook on tech IPO’s, allaying fears of a social media bubble, and paving the way for companies such as Box and even Jack Dorsey’s own Square to IPO in calmer seas than Twitter faced.

In the 18 months following their IPO, Facebook have been able to post strong results and lift their share price to $47, and only time will tell if Twitter will be able to grow in a similar fashion, but one thing is for sure – based on the listing alone, Twitter can claim #IPOsuccess.

 

About Johnny Vance

Johnny is the Area Director for Meltwater in the Americas. When not working, he enjoys sports, live music, and a good rooftop bar (weather permitting). He is Australian born, and offers a truly global insight in to all things sales, media and public relations.