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For some, Twitter’s lack of profit clouds its IPO

NEW YORK — It can help overthrow dictators. But can it make money?

Protesters famously used Twitter to organize during the Arab Spring three years ago. President Obama announced his 2012 reelection victory using the short-messaging service. But for all its power and reach, Twitter gushes losses — $65 million in the third quarter, nearly three times more than it lost a year before.

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As analysts size up Twitter ahead of its first public stock sale this week, more than a few express concern about the lack of profits. Of course, a company’s pre-IPO losses are no indication its stock will do poorly. Amazon.com had big losses before it went public 16 years ago. Its stock is up more than 18,000 percent since the IPO.

Even so, Twitter investors are being asked to take a leap of faith. It’s not clear when the company will sell enough ads to stanch the red ink.

‘‘They’re taking you to the edge of a swamp and saying, ‘Someday, this is going to be paradise,’ ’’ said Anthony Catanach, a professor of accounting at Villanova University.

Pessimists say Twitter is going public too soon. Optimists refuse to believe a company that has turned itself into a worldwide water cooler in just seven years can’t make big money — at least someday.

‘‘Twitter is in its infancy, and it’s a site a lot more people will go to,’’ says Michael Pachter, an analyst at Wedbush Securities. ‘‘They’ll figure out how to sell advertising.’’

Many money managers seem to agree. In a reflection of high demand from them for the stock, Twitter on Monday said it expects to sell stock for as much as $25 per share in the IPO, up from a previous $20 estimate.

Twitter, those who are bullish about the company point out, is allowing TV advertisers to grab the attention of people who are using Twitter to engage in running commentary on the shows they’re watching. When the lights went out during the Super Bowl, for instance, Oreo maker Mondelez tweeted a picture of the cookie with the caption, ‘‘You can still dunk in the dark.’’ People retweeted the ad 15,000 times in a few hours.

Debra Aho Williamson, at research firm eMarketer, says Twitter is ideal for targeting people with ads while they’re away from home.

But who are its biggest advertisers? The IPO document doesn’t say. When does it hope to profit? It’s not clear.

Twitter had 232 million users in September, up 6 percent from June. But the number had been growing at double-digit rates. Another problem: Those 232 million users are just one-fifth of the 1.19 billion monthly users on Facebook, a big rival for social-media ad dollars.

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