By William A. Foster, IV
To be thrown upon one’s own resources, is to be cast in the very lap of fortune. – Benjamin Franklin
At this very moment, I am watching the Twitter IPO and there is money flowing into the streets. The company’s initial IPO price was set to be $15-17, then rose to $25-27 on the eve of its IPO, and upon its actual first trade opened at $45.10. Seventy million shares just went from a value of $1 billion to over $2 billion. Evan Williams, co-founder and largest shareholder, just saw his net worth climb by $2.5 billion. Goldman Sachs, the lead investment bank for Twitter’s IPO, is set to take home almost $30 million of the $60 million in fees this IPO generated. The New York Stock Exchange lands a coup for pulling a major tech IPO from under NASDAQ’s nose after their Facebook debacle. What is not in any of that money? African America. Well, sort of.
African America’s presence is in Twitter from the place it typically is – as a consumer. While African Americans account for 13 percent of the United States population, we account for 22 percent of Twitter users. In terms of daily usage, we account for 11 percent, while European Americans usage is 4 times less than that. To say we have a dominant presence on Twitter would be something of an understatement. If African Americans left Twitter in mass, investors would be clamoring for bomb shelters as the stock would probably fall a part. So why are we not present where it matters most? Do we even know where it matters most?
When it comes to the capital markets picture of Twitter, we are completely absent. There were no African American underwriters present on the company’s S-1 filing. Again, part of that $60 million dollar pie in fees. In terms of early money or venture capital, there were no African Americans with significant investment in the company. Although, it is at least rumored that P. Diddy at one point tried to buy the company. Commendable on one hand and laughable on the other given his financial worth. By the time this company would have even been on Diddy’s radar it was already being valued at upwards of $1 billion – twice his net worth. As Chris Rock often reminds us there is a difference between rich and wealthy.
Sadly, this IPO highlights an all too often reality in African America’s economic behavior. We often are the suppliers of the content, but rarely if ever control the mediums of distribution. We often consume the product, but rarely are we the finance or investment behind its creation. Much of what I am saying here is repeated old hat, but it is worth repeating over and over again until the mindset and behavior indicates some movement of change. These are just some things to ponder the next time you are sending out your next 140 characters.
Mr. Foster is the Interim Executive Director of HBCU Endowment Foundation, sits on the board of directors at the Center for HBCU Media Advocacy, & President of AK Companies, Inc. A former banker & financial analyst who earned his bachelor’s degree in economics & finance from Virginia State University as well his master’s degree in community development & urban planning from Prairie View A&M University. Publishing research on the agriculture economics of food waste, full-time contributor at HBCU Money, and guest contributor for a number of African American media outlets.