I was really excited about the IPO of Twitter today. This is one company/service that I have used consistently over the last 5+ years, and I expect to continue using it for the foreseeable future. Which is why I really like Felix Salmon’s advice on how you can invest in Twitter without spending the cash:
So how is the individual investor supposed to navigate these treacherous waters? It’s actually incredibly easy. And it works like this. Twitter’s profits, if and when they ever appear, are going to be some fraction of its revenues. Its revenues, in turn, are going to be some fraction of the value it provides to its users. I have personally already extracted many thousands of dollars in value out of Twitter, over the past five years, and it hasn’t cost me a penny. On an ROI basis, I’m doing unbelievably well — and my returns are only going to keep on growing into the future.
Here’s my advice, then: take the amount of money you were thinking of investing in Twitter, and divide it by the rate at which you value your own time. So, if you were going to invest $5,000 and you value your time at $50 per hour, then you’d end up with a figure of 100 hours. Then, instead of spending the $5,000 on Twitter stock, spend 100 hours on Twitter: the cost is the same. The value you get from being on Twitter — from interacting with people you admire, from learning new things, from being able to express yourself so easily and concisely — will be much greater than the value you’d ever get from buying $5,000 of Twitter stock. And you’ll still have $5,000 left over to do whatever you want with, whether it’s putting it into some other investment or spending it on something awesome — a holiday, perhaps, or a gift to a friend, or even some fine wine.
I estimate my time is worth $100/hour and I wanted to invest $1,000 into Twitter. So that’s 10 hours I will be spending on Twitter in the next few weeks.
(As an aside: my limit buy order at $30/share didn’t go through this morning as TWTR opened at an astronomical $45.10/share).