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TWTR

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Re: TWTR

#241

Post by bolder88 »

pbreit wrote: post #188
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…

Hard to determine which part your most concerned about. When $25b of wealth is being created, there are going to be some folks making money. And you might not think some of those folks earned their take. First, you're too fixated on "loss-making". IPO companies are almost by definition loss-making. IPOs are fundraising events. Growth companies use money to invest in the business for growth, not profits (yet). Second,…

> When $25b of wealth is being created

Woah there. I think this is the fundamental issue. $25b of wealth hasn't been created. It's not free money. It's a scam.

Re: TWTR

#242

Post by downandout »

Bottom line: this company is extremely overvalued at the moment. It may or may not grow into that valuation, but for the next several years, it will be nothing more than a speculative play. The fact that the company priced itself at a much lower valuation shows how irrational the current market value is.

Re: TWTR

#243

Post by mathattack »

YZF wrote: post #233
ChuckMcM wrote: post #198

Earlier quoted context omitted.

I think you fundamentally misunderstand the process but that is ok, its not all that straight forward. The transaction here is between risk takers (venture capitalists and investment banks) and risk pricers (people who buy stock). Nobody is getting "ripped off" as long as everyone is following the rules set down by the SEC. Investors put money at risk. You know that because you've been here on HN a couple of years an…

The underwriters who will make hundreds of millions here... (EDIT, well, many millions at least) What sort of risk are they taking that justifies their rewards and how does it help the economy? And the individual bankers who will take millions of dollars in bonuses home because they get paid for the 12th time and don't get penalized for the 11 others, what sort of innovation did they contribute to the world? I think…

One comment... Google and Facebook each tried to stick it to the bankers in their own ways. In the end both struggled as a result. Google tried to cut out bankers and make them play by special "Just for the Google IPO" rules and rates. By creating a custom-IPO process, they saved on banker fees but wound up leaving an awful lot of money on the table.

Facebook went the other way. They tried to grab every last penny on the table. Their stock underperformed post-IPO which isn't good either.

You can put Twitter in an overreaction the other way - they didn't want to leave money on the table (raising the shares to 26) but didn't want to be too greedy either.

The bankers get paid to line up supply and demand. They may be helped by being an oligopoly, but right now the market isn't set up to cut them out of the loop.

Re: TWTR

#244

Post by lowboy »

ChuckMcM wrote: post #231
corford wrote: post #209

Earlier quoted context omitted.

Thanks Chuck for the thoughtful reply. If anything, I think I need to direct my negativity towards the public stocks and shares system as whole (i.e. it just appears to boil down to a numbers and sentiment game that doesn't seem to be a rational way to determine a company's "real" value at any given point in time) rather than looking for cynical players ripping people off. Looking at it another way: the whole thing i…

You're welcome of course, I suggest though that you might want to think about this a bit, " it just appears to boil down to a numbers and sentiment game that doesn't seem to be a rational way to determine a company's "real" value at any given point in time" The interesting question is "What makes this important to you?" I ask because there is absolutely a rational way to determine a company's value, it involves analy…

> if it is worthless to you, it is

When I was 8, I was selling some baseball cards at our yardsale, priced per their trade book value. At the end of the day, I was distraught because the only offers I got were well below the cards' value. The response from my mom still resonates to this day:

"Things are only worth what people are willing to pay"

Re: TWTR

#245

Post by mathattack »

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…

On Edit 2 - The banks don't double their money on large bets. They make smaller risk free sums. The banks are generally paid a certain % of the deal size, and are expected to make markets in the stock.

Most of the people who bought at $26 and flipped at $40 or $45 were individual customers of the banks. These could be retail investors, but they were largely institutional.

Generally institutional funds that do IPOs aren't flippers (investors prefer stable capital, so banks don't allocate as much to hedge funds) but they were the ones who had the shares.

Net - the banks weren't the ones getting rich from flipping, their customers were.

Re: TWTR

#246

Post by lowboy »

bolder88 wrote: post #241
pbreit wrote: post #188

Earlier quoted context omitted.

Hard to determine which part your most concerned about. When $25b of wealth is being created, there are going to be some folks making money. And you might not think some of those folks earned their take. First, you're too fixated on "loss-making". IPO companies are almost by definition loss-making. IPOs are fundraising events. Growth companies use money to invest in the business for growth, not profits (yet). Second,…

> When $25b of wealth is being created Woah there. I think this is the fundamental issue. $25b of wealth hasn't been created. It's not free money. It's a scam.

I think you have different requirements on what constitutes "wealth".

Re: TWTR

#247

Post by silverbax88 »

olefoo wrote: post #183
nine_k wrote: post #164

Earlier quoted context omitted.

Google had a solid, well-working monetization mechanism: AdWords, released in 2000, 4 years before the IPO. It was easy to see how it performs financially and why it might skyrocket. Can someone enlighten me how Twitter might earn some steady money?

Yes. Think about all of the paywalled news outlets out there. Think about how many journalists tweet their stories to drive their personal brand. Think about immensely popular twitter accounts and sought after domain experts. Think about the fact that someone who is very entertaining on twitter needs to leave twitter to ( consult, sell t-shirts, produce media, etc. ) if they want to make money. Think about how t.co m…

I don't want to sound dismissive, but this is very similar to the 'eyeballs' strategies that were bandied about prior to 2000.

If a million people use a link to go to a paywall site, that's awesome - except as of now the data shows that Twitter users don't become buyers as a general rule.

Can they make money? Sure. Can they make money with ads? Sure. Can they make money with massive vertical media funnels? Well...what will make them more successful than Apple, Google, Microsoft and TimeWarner who have all been trying to do the same exact thing for many years?

Not saying they won't...just saying I'd like to see some track record before I buy into an idea that no one has been able to make work yet.

Re: TWTR

#248

Post by giarc »

ceejayoz wrote: post #179
giarc wrote: post #123

Earlier quoted context omitted.

I don't trade stocks, nor do I claim to know that business at all. Can you explain this concept?

Shorting is selling a stock you don't own. You have to purchase it back (called "covering") later. If it goes down, you keep the difference between what you sold it for and what you had to repurchase it at. If the price goes up, though, you still have to buy it back. As a share's price technically has no upper limit, you could wind up in the situation where you sold a share for $10, intended to purchase it back at so…

Do you have/Do you get to set limits on it? For example, automatically buy back if it reaches $15?

Re: TWTR

#249

Post by giarc »

scotch_drinker wrote: post #163
giarc wrote: post #123

Earlier quoted context omitted.

I don't trade stocks, nor do I claim to know that business at all. Can you explain this concept?

If you buy a stock at 10 and it goes to zero (the bottom limit), all you lose is your $10. If you short a stock (thinking it's price will go down), there is no upper limit on how far it can go up. If it continues to go up, you're going to lose the amount of money at which you eventually "buy to cover". For example, if you hold your short until the price is $100, you lose $90.

Could you not hold forever?

Re: TWTR

#250

Post by bigbang »

vizzah wrote: post #204

What's funny is that anyone with a bit of a forward thinking could have doubled their money today by buying TWTR Inc (which is not Twitter) trading for $0.03 with an identical symbol TWTR, but on another market exchange. As already happened several weeks before (after it was announced Twitter will be trading as 'TWTR'), the wrong stock exploded due to traders mistakenly placing their buy orders. It should have been p…

It's interesting how Google got it mixed up as well. All the news stories for the stock are for the 'real' Twitter.
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