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TWTR

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Re: TWTR

#111

Post by MichaelApproved »

cft wrote: post #77
MichaelApproved wrote: post #57

Earlier quoted context omitted.

Please don't take this as snark but I wouldn't recommend shorting anything if you are so inexperienced that you don't have a trading account or don't know which one to use. Shorting stocks is extremely risky and should only be done by traders with lots of experience. If you really want to bank on Twitter going south, you can try buying puts when they're available. If you're not sure what puts are, leave this whole id…

i run a bootstrapped company that i founded in 2006, and i have some extra money i am totally comfortable of losing entirely. i view this as an experiment. i am looking for a serious practical advice.

I would still recommend against it but you should know that shorting isn't always available right after a stock IPOs. It can take about a month before its possible.

Its been a while since I've dealt with IPOs so I'm not 100% sure if that's the case anymore.

If you want to get involved, call TD Ameritrade. They can give you 100% accurate information and get you setup quickly.

Re: TWTR

#112

Post by trimbo »

corford wrote: post #82

Can someone with more clue please tell me that the following cynical thought I keep having is wrong and laughably misinformed (and then explain why)? Twitter's investors (who have plowed hundreds of millions in to a loss making company) decide to sell some of their stock at $26/share (after consulting with banks to arrive at this price). This will make right the losses they've experienced so far and pass the problem…

The term for this is "bagholder".

Congratulations to whomever was on the sell side of this today. Sucks to be an employee who is locked up for 180 days.

Re: TWTR

#113

Post by nonchalance »

corford wrote: post #82

Can someone with more clue please tell me that the following cynical thought I keep having is wrong and laughably misinformed (and then explain why)? Twitter's investors (who have plowed hundreds of millions in to a loss making company) decide to sell some of their stock at $26/share (after consulting with banks to arrive at this price). This will make right the losses they've experienced so far and pass the problem…

The simple answer is that a share price is the present price to pay for the future cash flows of the company. Just because they aren't making money now doesn't mean that will always be the case. If twitter starts making billions of dollars soon, and starts paying that out to investors, then everyone makes money.

They "eventually foot the bill" if twitter doesn't make money. Your cynicism reflects the fact that many companies don't end up making enough money. But there are counterexamples like GOOG where joe public actually did fairly well

Re: TWTR

#114

Post by clarky07 »

nine_k wrote: post #102
corford wrote: post #82

Can someone with more clue please tell me that the following cynical thought I keep having is wrong and laughably misinformed (and then explain why)? Twitter's investors (who have plowed hundreds of millions in to a loss making company) decide to sell some of their stock at $26/share (after consulting with banks to arrive at this price). This will make right the losses they've experienced so far and pass the problem…

Well... I can't see a fault in your logic. Maybe you remember the dot-com boom in 1999? It looked somehow similar.

Not really. not only did those companies not have profits, they also didn't have any revenues or users. Twitter has > 200 million users, and they are growing revenue 100% a year. Dot-com boom was a whole different animal.

Re: TWTR

#115

Post by nonchalance »

trimbo wrote: post #112
corford wrote: post #82

Can someone with more clue please tell me that the following cynical thought I keep having is wrong and laughably misinformed (and then explain why)? Twitter's investors (who have plowed hundreds of millions in to a loss making company) decide to sell some of their stock at $26/share (after consulting with banks to arrive at this price). This will make right the losses they've experienced so far and pass the problem…

The term for this is "bagholder". Congratulations to whomever was on the sell side of this today. Sucks to be an employee who is locked up for 180 days.

It only sucks to be an employee if his shares or options are contingent on a market cap above the current price.

Re: TWTR

#116

Post by icebraining »

pachydermic wrote: post #65
generj wrote: post #40

Earlier quoted context omitted.

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…

The issue is not just that models are hard. The claim of some economists is that while people behave irrationally, not everyone behaves irrationally all the time, so the issue is self-correcting as long as you have enough liquidity and participants in the market.

It's like the law of large numbers; while a single transaction may have a completely wrong price, a sufficiently large number will average the irrationalities out.

Re: TWTR

#117

Post by nine_k »

hyperpape wrote: post #99
corford wrote: post #82

Can someone with more clue please tell me that the following cynical thought I keep having is wrong and laughably misinformed (and then explain why)? Twitter's investors (who have plowed hundreds of millions in to a loss making company) decide to sell some of their stock at $26/share (after consulting with banks to arrive at this price). This will make right the losses they've experienced so far and pass the problem…

If twitter never makes money, you're mostly right. If twitter eventually makes enough money to justify its share price, you're wrong.

In 2013Q3, Twitter made $168M of revenue (not profit).

How do you think, how long is it going to take them to cover their current market capitalization of $24670M? After that, they will start making profit for the shareholders.

Re: TWTR

#118

Post by jrvarela56 »

corford wrote: post #82

Can someone with more clue please tell me that the following cynical thought I keep having is wrong and laughably misinformed (and then explain why)? Twitter's investors (who have plowed hundreds of millions in to a loss making company) decide to sell some of their stock at $26/share (after consulting with banks to arrive at this price). This will make right the losses they've experienced so far and pass the problem…

Apparently Twitter thought it was a good deal: http://www.cnbc.com/id/101110025

Banks' incentives are misaligned: a higher share price raises fees collected from underwriting since they get a % of total money collected in the IPO; a lower share price leads to commissions, goodwill and management fees from the private wealth/managed fund clients.

Could anyone elaborate on how these concerns are/may be separated to keep the process transparent?

Re: TWTR

#119

Post by corford »

tootie wrote: post #105
corford wrote: post #82

Can someone with more clue please tell me that the following cynical thought I keep having is wrong and laughably misinformed (and then explain why)? Twitter's investors (who have plowed hundreds of millions in to a loss making company) decide to sell some of their stock at $26/share (after consulting with banks to arrive at this price). This will make right the losses they've experienced so far and pass the problem…

The market still has to be willing to buy at $40+ which they evidently are. They do this expecting to sell down the line for even more.

So in effect it's just one giant speculation game that everyone's in on and the only trick is not to be left holding shares when the hype stops?

I guess I'm fine with that as long as everyone playing knows the rules (although it's tough for the index funds that have no choice in the matter).

Re: TWTR

#120

Post by trimbo »

nonchalance wrote: post #115
trimbo wrote: post #112

Earlier quoted context omitted.

The term for this is "bagholder". Congratulations to whomever was on the sell side of this today. Sucks to be an employee who is locked up for 180 days.

It only sucks to be an employee if his shares or options are contingent on a market cap above the current price.

I was a GRPN employee at IPO and I can confirm that even with your stipulation, it sucked.
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