Royal Mail v Twitter: which one should you sink your savings

[TrueBlueTerrier]

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If you don't mind trolls and the absence of profit, go for the blue bird. Or if you prefer an organisation that makes a profit but has very unhappy staff, put your money where the Queen's head is

One week, two big flotations: the government has made plain its intention to privatise Royal Mail, while the social networking site Twitter has announced plans to go public.

Which investment is the better bet? Compare and contrast the two businesses below.

Royal Mail

Founded: 1516.

Headed by: CEO Moya Greene.

Symbol: The Queen's crown, for now.

Nature of business: Enables millions of people to send messages to one another across the world, although nearly one in 10 is delivered late.

How does it make money doing that? A big increase in the lucrative parcel delivery sector led to profits of £324m.

Distribution of business: 48% parcels, 40% letters, 12% marketing mail.

Number of employees: 167,000.

Estimated value of business: £3bn.

Chief beneficiaries of share offering: The bankers, lawyers and accountants who could make up to £20m advising on the sale; Royal Mail staff, who will receive shares worth up to £2,000 each (although 96% of staff still oppose the sell-off).

Ostensible reason for flotation: The sale would allow an independent Royal Mail to borrow privately, according to business minister Michael Fallon, so it could expand.

Potential stumbling blocks: Political objections, proposed rolling strikes by staff, economic millstone of "universal delivery".

If I become a shareholder, can I use its service for free? No.

Twitter


Founded: 2006

Headed by: CEO Dick Costolo.

Symbol: A bird parting its beak to say things of no consequence.

Nature of business: Enables millions of people to send messages to one another across the world, although you are limited to 140 characters per go.

How does it make money doing that? It doesn't. But Twitter is likely to break even for the first time this year, largely thanks to ad revenue from "promoted tweets".

Distribution of business: 40% nonsense, 37% chat, 9% retweeted nonsense, 6% naked self-promotion, 4% spam, 4% news of dubious provenance.

Number of employees: Around 900.

Estimated value of business: A largely theoretical £6bn.

Chief beneficiaries of share offering: Twitter founders Evan Williams, Biz Stone and Jack Dorsey, who will make hundreds of millions of dollars apiece.

Ostensible reason for flotation: They probably had to – Twitter has in the region of 2,000 private investors, a number which would oblige it to go public under US Securities and Exchange Commission rules.

Potential stumbling blocks: Failure to deal with trolls who send tweets threatening violence; resistance from users to more advertising on the service; the air of mystery hanging over the company's finances; ongoing vulnerability to competition from the next big thing.

If I become a shareholder, can I use its service for free? Yes.

[UnhappyGremlin]

Personally, neither.

But given the choice, I'd go for Twitter.

There is just so much scope for revenues (like facebook before it) from advertising etc.
And none of the potential pitfalls that RM will always have.

[viking1488]

twitter

[justdeno]

Doh, Twitter.

[cloherty1976]

Twitter could be a great buy but how will it be priced on offering. Facebook fell sharply but has recovered significantly

[demon]

defo royal mail