Yesterday just after Twitter’s debut on Wall Street a good friend of mine tweeted and updated her Facebook status that she wasn’t going to buy Twitter because it didn’t have a profit. She couldn’t be more wrong.

Now we’re not going to talk about making big tech bets and trying to make a quick buck but there are some perfectly good reasons that Twitter saw such a high IPO and that they had a successful day one.

Business Insider’s founder, publisher and former Wall Street trader Henry Blodgett gave some great reasons that Twitter’s high IPO price wasn’t so silly.

Twitter is going public at a much earlier stage than Facebook. This gives the company a lot of room to grow, and the time to do it.

Now my friend who’s Facebook status update is above isn’t wrong about Twitter not making a profit. Actually they’re still losing a ton of money and in this case that’s a good thing. Now because they are starting from no profit, in fact in the red, way in the red, they are showing that the investment model worked. But add to that the fact as they start making money there is room for “radical profit margin” as the business scales.

Twitter also elected not to give away the whole company. They sold a limited number of shares on Wall Street and with that the demand shot up tremendously. So much in fact that my friend up there probably wouldn’t have been able to get in even if she wanted to.

Now naturally everyone is going to compare this IPO to Facebook. The first thing they need to consider is that while Facebook was rocky in the beginning, the people who had the foresight to get into Facebook for the investment instead of making a quick dollar are now making money. Facebook is trading in the high 40’s after a 52 week low of $18.

Also to consider when pitting Facebook’s IPO up against Twitter’s IPO is the fact that Facebook was already mature in it’s revenue growth. They also already had 50% operating profit margin leaving them very little room for growth.  Finally, they also put almost the entire company up for sale in it’s IPO and “lock up” releases.

Blodgett also goes on to say that social networks don’t have the same content costs as other media sites, they have platform costs. The users create the content for free.

Most investors and armchair quarterbacks also doubted LinkedIn which has proved to be a solid investment as well.