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Direct Public Offering – A Killer Idea

It is the rare time in life I wish I was somebody else. Or at least that I had the great idea someone else had. Today is one of those days where I wish I was Howard Orloff. He is the Mayor of, and has put out an open letter to Mr. Costolo.


Dick Costolo is the CEO of one of the great social media companies, Twitter.


The point of his open letter is simple enough. With Twitter now a point where the company is ready to go public it is time to think about how to go about this. Going nontraditional is not unheard of. When Google did its IPO it did not take the traditional route. It would be hard to argue with their success.


The classic Wall Street route does tend to line the pockets quite richly indeed of a select few lawyers and investment bankers.


Howard makes a strong point.Twitter Logo


“Look at it this way. Your company is forecasting at least $1 billion in sales by 2014. $150 million is 15 percent of that expected revenue. Are you really willing to hand 15 percent of Twitter’s expected income over to a group of people who have done nothing to help your company?”


For a moment let’s set aside the question of money and efficiency. Twitter by its very nature is a unique company in the world of communications. It is now a significant source of information that is not very well controlled by a authoritative (repressive) regimes.


The company by its very nature has become a company of the people, by the people and for the people. Certainly they are not a government agency and deserve to make a profit. I for one hope they make quite a handsome profit now and for many years to come.


One of the ways Twitter could demonstrate their unique position on the planet is by making their IPO so ordinary citizens of planet Earth can share in the success and wealth financially, in addition to being the heartbeat of one of social media’s best success stories.


Certainly how Wall Street handled the Facebook IPO should give Mr. Costolo some pause and consider this open letter. It is an idea whose time has come.

You can read the open letter here.

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