Twitter now has the same stock worth as the international Kraft Foods corporation.
I am not quite sure how that is possible.
TWTR
321–330 of 349 posts
Re: TWTR
#322Earlier 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…
The backlash will come the next time Facebook tries to raise money. That said, the cost is much less than the amount of money that Twitter left on the table.
Also - if every company flopped post-IPO, the IPO market would die. That's not Facebook's immediate problem, and again "doing the right thing" isn't worth leaving $20/share in the hands of flippers.
Re: TWTR
#323Earlier 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…
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 7…
The price went up ~5x from the $85 within the first year. One interpretation is that they had tons of good news. Another is that the initial investors didn't understand the value inside of Google, and perhaps the traditional road show would have helped.
I view the bankers like real estate agents. Many are worthless, but a good real estate agent can raise the price you sell your house for much more than the 6% in fees they charge.
Re: TWTR
#324Earlier 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…
"If Twitter is worth $50 bucks a share why were its investors willing to part with their stock for $26 a share only yesterday?" http://en.wikipedia.org/wiki/Time_value_of_money http://en.wikipedia.org/wiki/Expected_value
Or $18 the day before.
One answer is there are a lot of people who just want to get their billion out. Or million. Or hundred thousand. They are largely undiversified. They are selling to diversified owners who are less impacted by day to day price shocks.
Re: TWTR
#325TWTR might've been good at a $8 billion cap, but at $25 billion+, investors are dreaming. It is unsustainable and entirely driven by artificial scarcity and hype.
Stock markets can't price shit.
Re: TWTR
#326Earlier quoted context omitted.
"Google and Facebook each tried to stick it to the bankers in their own ways." This is a good example of a situation where you should stay close to what you know and stop thinking you can outsmart people who make a living a certain way everyday and know as much or more than your advisers. And definitely more than "you" (meaning the google guys) who made decisions based on things they read or what they were advised as…
mathattack is wrong though. Both Google and Facebook improved the amount of money the company got instead of lining the underwriter's pockets with that money.
With all due respect (and I'm wrong a lot!) Google left quite a bit on the table. Their stock price went up 500% from $85 over the next year. Wouldn't they have been better off capturing some of that?
The jury is still out on Facebook. Their IPO could hurt them getting money in the future, but maybe not.
It's not the underwriters who get paid when stocks double, it is the people they allocate the stock to.
Re: TWTR
#327Earlier quoted context omitted.
Did that information exist two days ago? Because if it did not exist, then there was no real $46 value. No REAL market (which is the place where information on value is) implies no monetary value (or a worthless one). What happens is that they did not guess (and this is an important term, there is no inherent value in a guess) TODAY'S market's expectations correctly. But that has little to do with true monetary loss…
"REAL". I think it's a lot less clear what that means in this context than you apparently do.
That there were explicit people explicitly willing to buy those shares at that price. Exactly that. The explicit term is quite important. Secret information is not part of the market (it is not market information).
Re: TWTR
#328Earlier quoted context omitted.
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 the…
Agreed, I should probably have said "there is a feeling they might have missed out on a lot of money". It's not clear cut but the share price hitting $46 suggests that they could have floated successful at a higher price.
Absolutely true. However, markets are not that easily understood and implicit expectations are quite difficult to assess.
My opinion is that if they had not gone public, nobody would have bought their shares for $46 each. But this is a worthless statement :)
Re: TWTR
#329Earlier 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.
No, it sucks to be an employee because it is possible that a material part of your wealth is now in a casino, your tax liability just matured, but your ability to pay for it is riding a train with a potential to crash, and all you can do for the next 180 days is watch.
Re: TWTR
#330Earlier quoted context omitted.
How does Wall St always seem to end up with the blame on these threads? They priced the Facebook IPO too high and they get the blame, they priced the Twitter IPO too low and they get the blame. The company just went public and raised $2B+ at a higher valuation initial valuation then anyone expected. IPOs are tricky things to get right. Give it a few months for the hype to settle down before you start screaming about…
Yeah how could people distrust banks after they've shown to be so completely trustworthy and transparent recently...?
And the SV/VC/Tech startup culture is just brimming with altruistic, wonderful people?
Sociopathy isn't restricted to finance. Silicon Valley has seen its share.