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HK Equity Fund: The Twitter IPO may be set for success but investors should remember the company made a loss of $70 million in the 1st 6 months of 2013. Hong Kong based HK Equity Fund have warned clients that, once the hyperbole of the forthcoming Twitter initial public offering has subsided, investors tempted to buy the stock will own a share of a company that has yet to make a profit. The micro-blogging service’s filing included the first ever look at its financials and “made for grim reading,” according to an HK Equity Fund tech analyst. “Although Twitter generated $253 million of revenue over the first 6 months of 2013, it also lost $69.3 million over that period and that’s in comparison to a loss of $49.1 million over the first 6 months of last year. When you take the fact that they lost more money despite increasing the number of monthly users by 44% over last year into account, there are grounds for concern,” he continued. Twitter’s IPO will be the most eagerly awaited in the tech space since the Facebook’s in May 2012 and, despite the worrying financials, it is expected to be over-subscribed. The stock is being pegged at $20.62 a share and, according to sources who preferred not to be named, there are 620 million shares outstanding putting a nominal value on the company of $12.8 billion. “While there are encouraging aspects about the company including the fact that it has clearly worked out how to generate revenue from mobile - something which had eluded Facebook at the time of its IPO – we won’t be acquiring the stock on behalf of our clients until such time as the business model shows a little more promise,” concluded the HK Equity Fund analyst. About HK Equity Fund HK Equity Fund established a presence in Hong Kong in 1995. Today their Hong Kong office is their main hub in the Asia-Pacific region. All of HK Equity Fund’s business groups have operations in the city, making this their largest office in the region outside Australia. From Hong Kong they offer corporate finance and advisory, institutional cash equities and research, equity derivatives and structured products, debt financing and funds management, and environmental financial products, futures, metals OTC hedging and fixed income trading services. For more info contact: HK Equity Fund Limited 28/F, 8 Wyndham Street, Central, Hong Kong Email Address: info@hkequityfund.com http://www.hkequityfund.com +85258084873
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