Earlier quoted context omitted.
2000 employees.
Who what, make 200k a piece?
With taxes and benefits, it's not that far off. Plus office space for them, computers for them, a whole host of other perks.
TWTR
291–300 of 349 posts
Re: TWTR
#292Earlier quoted context omitted.
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…
Help me understand why Facebook taking every dollar out of the market was a bad thing for them. I understand why Wall Street wasn't happy about it (since they expected a pop they could profit from & had to buy stock to fulfill their obligations... and why should taking a company public be an entirely risk-free profit opportunity anyway?) But, why was it bad for Facebook? Sure, their stock was below the IPO value for…
You're correct in your understanding - the company maximized the price and ended up with a nice chunk of cash in its bank account.
Internally someone starting the week of IPO might have received his stock grant at that week's price might not feel particularly upbeat when the stock price is later cut in half. There's always some churn and renegotiation going on at the companies whose stock price suffers significantly, and that makes it harder to concentrate on execution.
Re: TWTR
#293Earlier quoted context omitted.
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…
The undrewriters don't always come out doing so well. Take a look at the Facebbok IPO as an example. They didn't end up selling all of the stock that was issued in the IPO and had to buy up stock back from the market at elevated prices in order to keep the stock from plummeting on the first day. They still made money but not what they expected. As for the insider vs outsider. In order to issue an IPO, a number of sto…
>The undrewriters don't always come out doing so well. Take a look at the Facebbok IPO as an example. They didn't end up selling all of the stock that was issued in the IPO and had to buy up stock back from the market at elevated prices in order to keep the stock from plummeting on the first day. They still made money but not what they expected.
If they still made money, what's the risk? I don't consider "X chance of making 100% return, (100-X) chance of making 10% return" to be much of a risk.
Re: TWTR
#294Earlier 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?
Advertising will be a major component. But I think there are some other powerful revenue-making opportunities around data and services. Many investors appreciate a blurrier future since it can lead to more upside.
I would love to see twitter take the other route: no advertising, charge for the service. Keep the quality of the experience high (which advertising will certainly not do), and it will be more than worth a dollar or two per year to millions of people. Offer a premium service to high-value individuals and businesses (quite what that offer is, of course, I'm not entirely sure).
Advertising online is, I believe, in the long run, going to be tricky to maintain as a source of income, even for content-centric sites. For service-oriented sites, such as twitter, I just don't think it's the right approach, especially given a nice API which allows the ads to be bypassed. OK, I'm sure plenty of people will disagree, but it would be really nice for a high profile social network to just try this and see if they can make it work (I know linkedin's model is essentially this, but I see them as a very different beast from the general interest communication juggernaut that is twitter).
Re: TWTR
#295Earlier quoted context omitted.
The undrewriters don't always come out doing so well. Take a look at the Facebbok IPO as an example. They didn't end up selling all of the stock that was issued in the IPO and had to buy up stock back from the market at elevated prices in order to keep the stock from plummeting on the first day. They still made money but not what they expected. As for the insider vs outsider. In order to issue an IPO, a number of sto…
>The undrewriters don't always come out doing so well. Take a look at the Facebbok IPO as an example. They didn't end up selling all of the stock that was issued in the IPO and had to buy up stock back from the market at elevated prices in order to keep the stock from plummeting on the first day. They still made money but not what they expected. If they still made money, what's the risk? I don't consider "X chance of…
Then when you have a company, don't IPO. Then you don't have to give anything up to underwriters.
Re: TWTR
#296Earlier quoted context omitted.
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…
Recently I've been thinking about Kickstarter et al as a tech sector replacement for the stock market. What form or function does the stock market lay for companies that can be replaced with a more direct consumer/business to company investment? Is the instability and irrationality that speculation and large investment groups bring to the stock market necessary for funding/investing?
Exactly why would kickstarter be immune from irrationality, instability, or speculation?
On every trade two speculations are made, I don't see how bringing in unsophisticated retail investors would help with regard to price discovery.
Re: TWTR
#297Earlier quoted context omitted.
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.
Your comparison of revenue to market cap is nonsensical.
Shareholders will make a profit if the stock goes up or if it pays a dividend.
Re: TWTR
#298Earlier quoted context omitted.
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…
By creating a custom-IPO process, they saved on banker fees but wound up leaving an awful lot of money on the table.
Could you elaborate? I thought the dutch auction was a good way to maximize google's share of the pot (by taking money away from well-connected people who received shares at the IPO price). Looking back at historical reports it only "popped" 17% ($100 from offering price of $85) compared to twitter's 73%.
Re: TWTR
#299Can 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…
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 risk of losing money in a savings account is not zero. By losing I mean, losing its purchasing power. Banks have repeatedly gone bust throughout all of history, in all countries. But there is such a thing as deposit insurance. In the U.S., your savings (up to 100K per account) are 'insured' by the FDIC, but the FDIC has a mere pittance of money compared to the total deposits in all the banks, or even in one of the big banks. It cannot, using the money it has, save all depositors if a big bank is allowed to go bust.
So, given your bank goes bust in say, one of those recessions the U.S. experiences in greater and greater frequencies, either you lose nearly everything in your 'savings' account as the FDIC doesn't have enough money to cover all of its deposits the bank loaned out for its own profit - fractional reserve banking serving YOU since 1913. OR the FDIC pleads to the Federal reserve to 'give' it money, print it that is, causing massive inflation. Though in that latter case, you get the money first, so get to spend at current prices before the influx of new currency causes prices to inflate.
Though in current times, the solution is that these banks are too big to fail. So whenever they gamble your money to make a profit, yet lose, they get some of those nice big bailouts from the Fed. In that case the banks get to the spend the money first, and everyone else holding USD gets an inflationary hit - again you lose your purchasing power of your savings.
Re: TWTR
#300Income statements: https://www.google.com/finance?q=NYSE%3ATWTR&fstype=ii&ei=TL... About $553 million in revenue in the last year, with spending of $668 million.
And they say this isn't another tech bubble...
50x trailing revenue... This is terrifying. When was the last time we've seen valuations at 50x revenue for a $1bn+ company?