TWTR • Hacker News Board

Re: TWTR

#61

Post by pfortuny » Thu, Nov 07, 2013, 5:21 PM UTC

Tyrannosaurs wrote: post #24

robertgaal wrote: post #19

Earlier quoted context omitted.

I now little about the stock market, so I'm not sure why you're upset but it sounds important! :) Anyone care to elaborate?

The owners of Twitter prior to the flotation have basically sold a chunk of what they owned on the stock market. To do that they needed to put a value on those shares. Determining that price is pretty tricky but through one mechanism or another they settled on $26 a share. The fact that people are now willing to buy them for $46 a share suggests that they basically sold them at too low a price (arguably $20 a share t…

I understand what you mean by "they lost out a fair bit of money". However, that is not exactly true.

They have failed to gain that (admittedly huge) chunk of dollars but they have lost nothing: the have the same money they started with and they never had any more than that. You only lose when you start with X and end up with X-Y, for positive Y.

They have probably missed the opportunity to gain more but that is their mistake (if it is a mistake).

Re: TWTR

#62

Post by apaprocki » Thu, Nov 07, 2013, 5:21 PM UTC

arjunnarayan wrote: post #3

If it stays at $46, that's a gigantic fuck up. They left a billion dollars on the table, and that's borderline breach of fiduciary duty. Of course, we have to wait and see what it settles at, and it's a little premature to heap scorn just yet. But the initial reaction is it looks like they overreacted to the Facebook IPO debacle (in my book, Facebook did the best thing possible for the company and extracted as much v…

From the Bloomberg story, which sums it up:

“The company did everything to secure the most cash for itself while leaving some money for the IPO buyers,” said Josef Schuster, the founder of IPOX Schuster LLC, a Chicago-based manager of about $1.9 billion. “You need a pop at the opening to leave a good taste with everyone. They did a pretty good job managing the whole situation.”

http://www.bloomberg.com/news/2013-11-07/twitter-raises-1-82...

Re: TWTR

#63

Post by [deleted] » Thu, Nov 07, 2013, 5:21 PM UTC

generj wrote: post #40

Tyrannosaurs wrote: post #20

Earlier quoted context omitted.

> Markets are highly irrational. That depends which recent Nobel Memorial Prize winner you believe.

In this world of quant-bots, I don't know how anyone can argue that we have a fully rational market. My understanding is that much of the progress in economics has been merging economics with psychology to identify rational failures.

[deleted]

Re: TWTR

#64

Post by omellet » Thu, Nov 07, 2013, 5:22 PM UTC

the_watcher wrote: post #36

I'm not an expert in the stock market, and the only stock I own is Facebook (which I bought a long time ago), but I am confused as to why Facebook is dropping today while there is so much enthusiasm for Twitter. Buying Twitter is basically betting on mobile advertising, which Facebook is the clear leader of. Is it possibly related to people with Facebook stock selling some to get in on Twitter? Are they entirely unre…

People are dumping shares of hot stocks like FB and Netflix to free up capital to buy Twitter.

Re: TWTR

#65

Post by pachydermic » Thu, Nov 07, 2013, 5:22 PM UTC

generj wrote: post #40

Tyrannosaurs wrote: post #20

Earlier quoted context omitted.

> Markets are highly irrational. That depends which recent Nobel Memorial Prize winner you believe.

In this world of quant-bots, I don't know how anyone can argue that we have a fully rational market. My understanding is that much of the progress in economics has been merging economics with psychology to identify rational failures.

"Homo economicus" is still really important for macroeconomics. The reason for this is pretty simple: designing rich, large models is still hard to do and the practical limitations introduced by basing your assumptions on the idea that people act irrationally instead of rationally can make things too complicated to be of practical use.

So in microeconomics or small models, people can practically accept and implement these (pretty obviously true) ideas that people don't behave rationally. But in large scale macroeconomic models it's hard to do. It would certainly be a lot easier if people just acted like computers...

Re: TWTR

#66

Post by 3327 » Thu, Nov 07, 2013, 5:23 PM UTC

the_watcher wrote: post #36

I'm not an expert in the stock market, and the only stock I own is Facebook (which I bought a long time ago), but I am confused as to why Facebook is dropping today while there is so much enthusiasm for Twitter. Buying Twitter is basically betting on mobile advertising, which Facebook is the clear leader of. Is it possibly related to people with Facebook stock selling some to get in on Twitter? Are they entirely unre…

I am an expert on stocks, (Wallstreet HF PM for many years), quick explanation is money moving from FB to TWTR. seeing the momentum funds sell FB and put into TWTR as they are correlated plays.

Re: TWTR

#67

Post by AsymetricCom » Thu, Nov 07, 2013, 5:23 PM UTC

joezydeco wrote: post #45

AsymetricCom wrote: post #35

Earlier quoted context omitted.

Which says to me that bankers are probably still holding a lot of TWTR. If that doesn't change short-term, it could poison the social network.

I believe going public poisons any company. CEOs change their vision from long-term to insanely short-term. Gotta make those quarterly numbers or they're screwed. There have been a few exceptions to this, Apple being the most famous one. Facebook was on the same track but the SEC rules about share ownership forced their hand.

It depends on who holds the stock, and how they're voting. That's pretty clear. When bankers buy a company anticipating a highly profitable return via their models and slam that expectation into the leadership like a floppy do... you know what happens.

Re: TWTR

#68

Post by brosephius » Thu, Nov 07, 2013, 5:23 PM UTC

arjunnarayan wrote: post #3

If it stays at $46, that's a gigantic fuck up. They left a billion dollars on the table, and that's borderline breach of fiduciary duty. Of course, we have to wait and see what it settles at, and it's a little premature to heap scorn just yet. But the initial reaction is it looks like they overreacted to the Facebook IPO debacle (in my book, Facebook did the best thing possible for the company and extracted as much v…

There's no guarantee that all the IPO shares would have been placed at $46 (I'd doubt it).

Re: TWTR

#69

Post by apaprocki » Thu, Nov 07, 2013, 5:24 PM UTC

cft wrote: post #38

Can someone advise what's the best way to buy derivatives (etrade,scottstrade, etc): the fastest way to open an account, the best order execution times? I want to invest some money to short this.

You can open an E*Trade account and then apply for whatever options level (1-3) you desire. You'll be asked questions about whether you understand the options market and assume the risks. There are then specific requirements for how much cash or marketable securities you need to have in account if you want to buy puts or sell calls.

Re: TWTR

#70

Post by [deleted] » Thu, Nov 07, 2013, 5:25 PM UTC

cft wrote: post #38

Can someone advise what's the best way to buy derivatives (etrade,scottstrade, etc): the fastest way to open an account, the best order execution times? I want to invest some money to short this.

[deleted]