With Twitter's pre-IPO price range rising by the hour and its oversubscription levels growing exponentially - matched only by the volume of "why you must buy Twitter" discussions on CNBC, Reuters [5] created the following simple interactive calculator to enable the retail investor to 'judge' whether buying it out of the gate is the best use of your 401(k)...
The calculator estimates a value for Twitter. The key variables are the balance between US and non-US comparable companies and the balance between two different valuation methodologies.
US comparables are Facebook and LinkedIn, while non-US comps are Sina and Tencent (both Chinese). The valuation methods are price-to-forward-sales and price-per-monthly-user.
Additional variables include an IPO discount and the proportion of new shares that will be issued...
Click image for interactive calculator
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