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LIVE: Twitter IPO

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Re: LIVE: Twitter IPO

#21

Post by Osiris »

dangrossman wrote: post #11

A $45 market price after a $26 IPO means Twitter left over $1B on the table, doesn't it? They would've had that money, instead of the first investors who can now immediately sell the shares at a huge profit, if the initial price was set closer to what the market would've paid.

A question: In an IPO, does the company have to sell every share for the same price? As in a typical market, the price fluctuates based on demand. Couldn't they evaluate the demand for the shares and adjust their sell price higher to compensate, or is it part of the legal framework that they are required to sell all the shares at exactly the same price?

Re: LIVE: Twitter IPO

#22

Post by applecore »

dangrossman wrote: post #11

A $45 market price after a $26 IPO means Twitter left over $1B on the table, doesn't it? They would've had that money, instead of the first investors who can now immediately sell the shares at a huge profit, if the initial price was set closer to what the market would've paid.

They only floated about 10% of their outstanding stock on a fully diluted basis.

Twitter (the company) could have raised more, but individuals who owned the stock before the IPO still see the gain, unless they did a secondary market offering.

Given the dangers of overpricing, it's a price worth paying.

(If the stock falls in value on the first day of trading, it may lose its marketability with investors and hence even more of its value.)

Re: LIVE: Twitter IPO

#23

Post by larrys »

sheri wrote: post #14
sz4kerto wrote: post #2

The indicative $45-47 opening price finally convinced me of getting out of (tech) stocks in general. We're talking about $20B valuation for a company which has never made money. I know "this is different", and it has a lot of users, and so on. Still, I'd be cautious.

Maybe I'm old, but I'm still struggling to figure out if Twitter is a short-term fad, or a serious here-to-stay concept (and thus a company) in our lives. I like to imagine say a 10-15 year time frame, and if I think the company will still be around then. Netflix, for example, at least has a business model which I see becoming pervasive 15 years down the line (on-demand entertainment over the internet). Of course I d…

I'm on the side of no long term value.

(Not to mention that even if it is long term can it be profitable.)

The reason I think "no long term" is that in it's current incarnation it doesn't hold value for "normals" other than people who want to follow celebrities or of course the tech crowd. Or are obsessed with knowing the moment there is an earthquake on another continent. That's essentially entertainment. It's not something you need to know (in masses of course there could be individuals that need to monitor those things.)

I mean sure it is useful to be notified of some event that happens but personally I don't think the need for that is greater than the current alternatives of getting that information (or that a better way to get that information wouldn't be developed).

Most employed people with "regular" jobs are not all obsessed with twitter and the information that it delivers.

Netflix, otoh, delivers a product that people have received for many years by a better method. And the money making part is baked right into the product.

Re: LIVE: Twitter IPO

#24

Post by taigeair »

Osiris wrote: post #21
dangrossman wrote: post #11

A $45 market price after a $26 IPO means Twitter left over $1B on the table, doesn't it? They would've had that money, instead of the first investors who can now immediately sell the shares at a huge profit, if the initial price was set closer to what the market would've paid.

A question: In an IPO, does the company have to sell every share for the same price? As in a typical market, the price fluctuates based on demand. Couldn't they evaluate the demand for the shares and adjust their sell price higher to compensate, or is it part of the legal framework that they are required to sell all the shares at exactly the same price?

They sell the price at that price to the underwriting investment bank (who takes the risk) and they're done. Then the stocks are out there for people to trade. Twitter doesn't get money or lose money from the market price of the stock. They get more money when they issue/sell more stock.

Re: LIVE: Twitter IPO

#25

Post by larrys »

JonFish85 wrote: post #4
sz4kerto wrote: post #2

The indicative $45-47 opening price finally convinced me of getting out of (tech) stocks in general. We're talking about $20B valuation for a company which has never made money. I know "this is different", and it has a lot of users, and so on. Still, I'd be cautious.

Biggest thing to remember is that this is an exit, the end for the early investors. As far as I'm concerned, that's all it is. To me, in a lot of ways, this is the "end" of Twitter (not as a company, necessarily) in the sense that everything changes now. All of the details of their financials are going to be exposed from here on out, for better or worse. It's no longer about just user acquisition, it's about making m…

"Biggest thing to remember is that this is an exit"

Which is always interesting because regular people think about whether ideas make sense and investors think about whether they can simply get the idea to the point where a greater fool buys into it. At that point they are right and everyone who thought that the idea wouldn't work is wrong. Ironically.

Re: LIVE: Twitter IPO

#27

Post by gcv »

nicholassmith wrote: post #12

That's up an enormous amount now, looks like the problems which plagued the Facebook IPO launch were dealt with long in advance.

Facebook was Nasdaq. Twitter is NYSE. Wouldn't have the same problems.

Re: LIVE: Twitter IPO

#28

Post by larrys »

jstalin wrote: post #19

A particular quote from P.T. Barnum comes to mind...

I've always noticed that there is sometimes a correlation between those that make money and those that can understand what a "sucker" will go for.

What I mean is that many people make money by understanding the stupidity of people and taking advantage of that.

As opposed to thinking all logically with intelligence as far as why would someone pay me to do that! It's so simple!

An example of this (that might hit home to the tech crowd) is a "tech guy/gal" who under prices what they do thinking it is simple to install open source software on someone's box. Instead of realizes that to a "normal" it's a big ball of confusion and they would be quite pleased to just have an installed turnkey product with 5 minutes of handholding.

I can't stress this enough. You get paid for what you know that someone else's doesn't know. And you deserve to. So don't give it away without getting paid.

Re: LIVE: Twitter IPO

#29

Post by tomkin »

I'm incredibly ignorant when it comes to the stock market. But why would any company elect to go public? Let's see: you lose your creative edge 90% of the time, you destroy the relationships with your users 50% of the time, your team vision becomes one that must equate to profits - forever. This is not natural - to be constantly growing and profiting. Small businesses (you know, the millions of them) seem to hold their ground better in turbulent times, despite their lack of hand-over-fist profits.

This idea of unlimited growth is unsustainable and people who can't see that are just as bad as a 2008-era stock broker as far as I can see. It's a very willing and eager group of apologists and utopian dreams. Honestly.

Re: LIVE: Twitter IPO

#30

Post by stephenhuey »

stephenhuey wrote: post #17
sz4kerto wrote: post #8

Earlier quoted context omitted.

No, never.

Here are some numbers on revenue and losses: http://www.businessinsider.com/what-the-heck-is-wrong-with-t...

And here are some detailed numbers:

https://www.google.com/finance?q=NYSE%3ATWTR&fstype=ii&ei=TL...

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