News of Twitter filing for a $1-billion initial public offering (IPO) on Thursday sent investors into a buying frenzy that they failed to double check the spelling of the company of the stocks they were paying.
As a result, shares of the Tweeter Home Entertainment Group soared in value by 700 per cent even if the electronic retailer had filed for bankruptcy in 2007 and closed in 2008, although it still had shares trading under the symbol TWTRQ, CNN Money reports.
Twitter, which Is spelled with one "i" and not two "e's," plans to use the symbol TWTR, which could eventually lead to confusion among investors who many not be familiar that the act of posting messages on the popular microblogging site also uses two "e's" but the portal is spelled with a single "i."
On Thursday, Tweeter shares closed at 1 cent which is within its normal trading range, but on Friday, the day after Twitter filed documents for an IPO, shares of TWTRQ jumped up to 15 cents or a gain of 1,400 per cent before it settled down to 700 per cent.
Although Tweeter is closed, shareholders could still trade its stock on over-the-counter markets called pink sheets, instead of on major exchanges.
For the IPO, Twitter is offering 472,613,753 shares.
While Twitter offers impressive numbers such as 218.3 million monthly active users who have posted more than 300 million tweets as well as revenues of $316.9 million in 2012 and $253.6 million for the first six months of 2013, it also logged a loss of $79.4 million in 2012 or a total of $418.6 million since it started.
Those last numbers prompted CNN Money to comment that Twitter isn't ready for Wall Street since its financial picture is that of a "troubled and deeply unprofitable digital media company with lackluster growth and an exploding cost base."
Cyrus Sanati of CNN pointed out that while Twitter is the hottest name to hit the IPO world since Facebook's IPO in 2012, if it had not figured out how to monetise its content, it is an indicator of something seriously wrong with its management or platform.
He emphasised that Twitter has never made a dime because although the microblogging site's revenue dramatically grew over the past five years, cash that came out also went out on several things such as servers and stock options for employees.
Mr Sanati added that Twitter is actually not a tech firm, but a digital advertising platform since about 85 per cent of its income is from selling ads, similar to Facebook.
Given those numbers, Mr Sanati's recommendation is that "investors should tweet with caution."