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LIVE: Twitter IPO

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Re: LIVE: Twitter IPO

#41

Post by the_watcher »

tomkin wrote: post #29

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 the…

All of the money-related reasons others have talked about are valid, but there are also some legal reasons where you have to go public (such as a certain number of shareholders, which comes into play when companies give stock options as compensation). Facebook would still be private if they legally could have delayed any longer, I believe. You are entirely right that there are huge advantages to being private in a lot of cases.

Re: LIVE: Twitter IPO

#43

Post by the_watcher »

yannisp wrote: post #37

Regarding the profitability piece, they closed their mopub acquisition this week - something i believe will make or break the future of TWTR reopvenue... I believe the money is on that piece to perform or the company is dead in the water.

MoPub is the key for Twitter, I agree. It offers them a way to jump in as the leader in multi-touch/multi-device attribution, something that marketers will pay through the nose for (I know I would). I'm really interested to see what they do with it.

Re: LIVE: Twitter IPO

#44

Post by the_watcher »

mmahemoff wrote: post #36
Osiris wrote: post #21

Earlier quoted context omitted.

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?

Google tried to pioneer a Dutch auction IPO when they went public in 2004. Buyers would make bids for an amount of stock, and somewhat bypassing the banks, but it was less than successful. The idea has never taken off, not yet anyway. It seems the banks still play an important role in marshalling large funds, and there's apparently significant benefit from a "hot" stock gaining on day 1 (albeit irrational).

I thought that it was mainly successful for Google, but that it was Google being such an insanely in demand stock that led to the success, not the auction itself. Basically, a Google IPO couldn't really fail. I do know that the banks hated it, and the only reason Google got away with it is because Larry and Sergey couldn't have cared less.

Re: LIVE: Twitter IPO

#46

Post by recuter »

the_watcher wrote: post #40
larrys wrote: post #23

Earlier quoted context omitted.

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 s…

>> 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. Do you watch CNN? Do you follow breaking news? Then Twitter has demonstrated value for "normals," as it's become the best platform for breaking stories (for better or for worse).

I for one do not watch CNN and don't know anybody who does outside of an Airport or hotel setting.

Re: LIVE: Twitter IPO

#47

Post by alphaBetaGamma »

pachydermic wrote: post #34
tomkin wrote: post #29

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 the…

You get to turn pieces of paper which say "I own x% of TWTR" into pieces of paper which say "I own $y". A lot of people are happy to make that trade, especially if they don't think their ownership of the company is worth the amount of money that people are willing to pay for it. As for the people who actually just work at Twitter, or who run Twitter? Well, you certainly get a lot more money to work with so long as yo…

Actual, a lot of economic activity comes from small businesses: about half the US GDP is generated from companies with less than 500 employees.

http://en.wikipedia.org/wiki/Small_business#Contribution_to_...

Re: LIVE: Twitter IPO

#48

Post by mmahemoff »

the_watcher wrote: post #44
mmahemoff wrote: post #36

Earlier quoted context omitted.

Google tried to pioneer a Dutch auction IPO when they went public in 2004. Buyers would make bids for an amount of stock, and somewhat bypassing the banks, but it was less than successful. The idea has never taken off, not yet anyway. It seems the banks still play an important role in marshalling large funds, and there's apparently significant benefit from a "hot" stock gaining on day 1 (albeit irrational).

I thought that it was mainly successful for Google, but that it was Google being such an insanely in demand stock that led to the success, not the auction itself. Basically, a Google IPO couldn't really fail. I do know that the banks hated it, and the only reason Google got away with it is because Larry and Sergey couldn't have cared less.

A Google IPO was always going to do well, which is part of the reason they felt they could take a gamble like that. But the stock doubled in 60 days [1], so "eBay for IPOs" didn't create anything like a perfect supply-demand scenario. Maybe it would be different now.

1. http://www.marketwatch.com/story/google-ipo-has-doubled-afte...

Re: LIVE: Twitter IPO

#49

Post by pachydermic »

alphaBetaGamma wrote: post #47
pachydermic wrote: post #34

Earlier quoted context omitted.

You get to turn pieces of paper which say "I own x% of TWTR" into pieces of paper which say "I own $y". A lot of people are happy to make that trade, especially if they don't think their ownership of the company is worth the amount of money that people are willing to pay for it. As for the people who actually just work at Twitter, or who run Twitter? Well, you certainly get a lot more money to work with so long as yo…

Actual, a lot of economic activity comes from small businesses: about half the US GDP is generated from companies with less than 500 employees. http://en.wikipedia.org/wiki/Small_business#Contribution_to_...

Interesting - although it's worth pointing out that it's about half of private sector GDP, not half of US GDP. Also, I'm not sure I'd call a business with over 100 employees "small", but I guess that's the definition they're going with.

Here's the full PDF of that source: http://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf

Also, while they're a government agency and cite their sources, their job is to advocate for small businesses. Does anyone else have more sources to look at?

Re: LIVE: Twitter IPO

#50

Post by larrys »

the_watcher wrote: post #40
larrys wrote: post #23

Earlier quoted context omitted.

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 s…

>> 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. Do you watch CNN? Do you follow breaking news? Then Twitter has demonstrated value for "normals," as it's become the best platform for breaking stories (for better or for worse).

"Do you watch CNN? Do you follow breaking news? Then Twitter has demonstrated value for "normals,"

Look there are people that watch the nightly news every night. Enough people and enough value to advertisers that there is the nightly news. Forgetting though that that market is declining they have a monetization platform in place (partly by legacy because they were the only source of information so it just lives on) and partly because the format is such (tv commercials) that it provides value for advertisers.

The question with twitter is simply how much value can be delivered long term to people that follow (as one example) breaking news. And how much that can be monetized and become a profitable business model.

By the way part of CNN is the entertainment value that can keep an audience captivated for hours watching every last minute of storm or conflict or invasion coverage. It's infotainment that drives the bus there and makes the business model work. Highly crafted and entertaining.

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