logo
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

 


Twitter Going to the NYSE, Casual Investors Odds Slim for Big, Immediate Profits

By  +Follow October 16, 2013 9:06AM
Share:
Tickers Mentioned:

In filings with the Securities and Exchange Commission on Tuesday, Twitter, Inc. said that it is taking its initial public offering to the New York Stock Exchange, rather than the Nasdaq (NDAQ) exchange, dealing a blow to the smaller exchange that hoped to win its favor.  The social media company intends to list under the ticker “TWTR” with its reported  $1.0 billion to $1.5 billion IPO.  The exchange choice has to make one wonder if the decision had anything to do with the debacle of the heavily anticipated IPO for Facebook (FB) in May 2012.

The abridged version of the Facebook price story goes like this:  The IPO price was first expected at a low end of $25 per share, which eventually was set at $38 per share on huge investor appetite.  Shares gapped up to start trading at $42 and ran to about $45 on the IPO day mired in chaos (delay to the of opening trading and other trading disruptions as Nasdaq’s system couldn’t handle the volume) before closing back near the $38 mark.  In subsequent months, shares plunged to a low of $17.55 on a bloated valuation, insider selling, dilution and analysts bashing the company for a lack of a plan to monetize its mobile business.  In Facebook’s defense, just over a year later, the stock has hit all-time highs.

No date has been disclosed for the Twitter debut, but most analysts are under the assumption that it will be by the end of the year with an initial price around $29 per share.  People close to the source, who wish not to be identified, according to the NY Times, say that the IPO will be priced on November 14 with trading starting the next day.

Facebook’s initial prospectus showed 845 million active monthly users.  The recent SEC filing from Twitter shows that, quarter-over-quarter, monthly active users at Twitter rose to more than 230 million from 215 million for the three months ended September 30.

Regulatory filings also showed that Twitter expanded revenue and net loss during the third quarter.  Revenue increased to $168.6 million, versus only $82.3 million in the same quarter last year.  While many might extrapolate doubling sales as a great thing for the company, it’s hard to overlook that net losses grew even more, proportionately speaking, increasing from $21.6 million to $64.6 million, as the company spent more on stock-based compensation and research and development.

Advertising revenue jumped 39 percent from the June period to $153.4 million.

Twitter is expected to hit the road this month peddling its offering to try and get institutional investors to sink cash into their business model, which now includes partnerships with Comcast ($CMSCA) as the future of a combination of social media and mobile content.

The question there is:  Will Wall Street overlook a tripling net loss to get a piece of the social media pie?  The answer is:  Yes.  In fact, to many, the losses will mean that Twitter is working to reach the type of scale that institutional investors will want to see.

Wall Street is – I dare say – blind to running IPOs anymore.  It seems safe to say that if soup and sandwich restaurant operator Potbelly (PBPB) gapped up more than 100 percent in its debut on the Nasdaq, that Twitter’s crazily-anticipated IPO may gap heavily beyond its IPO price, so average retail investors shouldn’t hold their breath to ever see $29 or $30 per share.  Potbelly priced its offering at $14 per share and gapped to about $30 per share at its opening of trading, representing one of the best performing IPOs this year.  Of course, casual retail investors never saw that opportunity at $14 and now the stock is down, closing Tuesday at $25.68 after hitting as low as $23.78 as initial investors apparently booked profits.

Bottom line is that this doesn’t appear to be another Facebook as Twitter seems actively trying to avert falling into that social media and initial investing chasm that Facebook did as the markets are chomping at the bit for Twitter to go public.  The original investors are going to (rightfully so) make a killing on their investment and the institutions behind it are going to push like crazy to get their following investment community to buy into it.  To the average person sitting behind a keyboard on IPO day:  Good luck because most of these types of deals generally require a really quick finger to bank a small profit if/when the stock price gaps way ahead at the start of trading as it seems likely TWTR will do.  Taking a “glass is half full” attitude, maybe the price will gap and continue to run, at least providing an opportunity for casual traders.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Signup for our daily newsletter and get our best articles emailed right to you!

Results for FB
Green Lantern
27 Aug 15 19:15:41
Long $LOCK, $BAC, $DIS, $AAPL, $FB, $SUNE. Short $BBY, $VXX. Watching $NFLX for re-entry.
Larry Lovrencic
27 Aug 15 19:14:58
"Watch cloud resistance around $92 $FB Facebook FREE Stock Review Aug27" by @IchimokuCo on @LinkedIn http://t.co/vHg8a3KoPJ
AiDO
27 Aug 15 19:14:42
RT minyoung_sohn: 😎💬 #AI #DeepLearning #MachineLearning 💻🌇 6 Machine Learning Giants to Watch $AMZN $FB $GOOG $IBM… http://t.co/qLw0d70kjW
AiDO
27 Aug 15 19:14:41
RT aidotech: 😎💬 #AI #DeepLearning #MachineLearning 💻🌇 6 Machine Learning Giants to Watch $AMZN $FB $GOOG $IBM $MSF… http://t.co/qLw0d70kjW
dmackdaddy
27 Aug 15 19:14:15
Finally! "Instagram loosens limits, enables portrait, landscape modes for photo & video" $FB http://t.co/wkNJJ6McBQ
CloudCharts
27 Aug 15 19:13:40
Watch cloud resistance around $92 $FB Facebook FREE Stock Review Aug27 http://t.co/niEZoJxxeV #stocks $$ http://t.co/XseipqKorZ
FXTrader Hub
27 Aug 15 19:13:40
Watch cloud resistance around $92 $FB Facebook FREE Stock Review Aug27 http://t.co/ztOPGOrdK5 #stocks $$ http://t.co/xDEstn75dq
Larry Lovrencic
27 Aug 15 19:13:40
Watch cloud resistance around $92 $FB Facebook FREE Stock Review Aug27 http://t.co/66OHvXpqSv #stocks $$ http://t.co/6YLFnOBwuy
Ichimoku Charts
27 Aug 15 19:13:32
Watch cloud resistance around $92 $FB Facebook FREE Stock Review Aug27 http://t.co/L2NLvAypRT #stocks $$ http://t.co/euihpJ2eGV
PennyStock Zone
27 Aug 15 19:13:04
http://t.co/DkEVfcc3Yj <-- Triforcetrader interview: See how he is on track to MILLION $$ in profits first year trading! $LBIO #stocks $FB
Videoclipsmiami
27 Aug 15 19:13:01
RT @DDRANTE: @CNBC $MYEC $AAPL $FB $NFLX #MERCHANTS $AAPL watch your profits grow . Compare Credit card fees to $MYEC https://t.co/XWFs84V…
Eric Li
27 Aug 15 19:12:26
Expect a slightly down or flat day from the market Tmr. People are going to take profit and reduce exposure into the weekend. $FB $AAPL $JPM
Tricia
27 Aug 15 19:06:28
RT @sa_alerts: @Darientricia $FB Facebook first: 1B people use it in a single day, Zuckerberg says http://t.co/HF4ia1k0hB
Bank The Short
27 Aug 15 19:01:36
RT @timothysykes: I cannot friggin wait for this event http://t.co/6fsxzC8djO you should def come/network Oct 3-5 $FB $TWTR
Stockchase.com
27 Aug 15 19:00:58
@Facebook is Top Pick at StockChase http://t.co/5AvXsEY7LH #stockaction $FB-Q
Stockchase.com
27 Aug 15 19:00:53
1.5 billion users, which is part of the thesis of why he owns the stock. It is th...@Facebook http://t.co/wvaEBLkUb5 #stocks $FB-Q
Timothy Sykes
27 Aug 15 19:00:45
One of the bravest little boys I've ever met http://t.co/loRhwmWLcc get inspired $FB $TWTR
Clark Joseph Kent
27 Aug 15 19:00:07
Carnage made these tech stocks cheap, says analyst $FB $PCLN $BABA $AMZN $NFLX $GOOGL http://t.co/2j0U7fubIk
Alec P
27 Aug 15 18:59:53
RT @bespokeinvest: Here's a look at the biggest Nasdaq 100 gainers since the Monday low: https://t.co/1O2SyEm3Ts $BIDU $GILD $NFLX $CELG $…
AiDO
27 Aug 15 18:59:24
RT minyoung_sohn: 😎💬 #AI #DeepLearning #MachineLearning 💻🌇 6 Machine Learning Giants to Watch $AMZN $FB $GOOG $IBM… http://t.co/qLw0d70kjW
AiDO
27 Aug 15 18:59:23
RT aidotech: 😎💬 #AI #DeepLearning #MachineLearning 💻🌇 6 Machine Learning Giants to Watch $AMZN $FB $GOOG $IBM $MSF… http://t.co/qLw0d70kjW
Binary Signals
27 Aug 15 18:56:37
RT @BUZZ_Just_In: Select your Social Media stock & start following portfolio's $LNKD $FB $ZNGA http://t.co/0lDjsEei8y http://t.co/4Km6qzPpIW
Chrisfoo71
27 Aug 15 18:56:06
RT @MobilePotpurri: #Facebook tests out #FacebookM - their answer to #Siri and #Cortana - $FB #mobile #AI https://t.co/21lOpWoX43
FinBUZZ Just-IN
27 Aug 15 18:45:30
Select your Social Media stock & start following portfolio's $LNKD $FB $ZNGA http://t.co/0lDjsEei8y http://t.co/4Km6qzPpIW
Jim Treacy
27 Aug 15 18:45:23
@FoxBusiness @facebook @chrisdessi: What advice do you have for Mark Zuckerberg...needing no advice from me.." http://t.co/mvDcEUiLOW $FB
AiDO
27 Aug 15 18:45:12
RT minyoung_sohn: 😎💬 #AI #DeepLearning #MachineLearning 💻🌇 6 Machine Learning Giants to Watch $AMZN $FB $GOOG $IBM… http://t.co/qLw0d70kjW
AiDO
27 Aug 15 18:45:12
RT aidotech: 😎💬 #AI #DeepLearning #MachineLearning 💻🌇 6 Machine Learning Giants to Watch $AMZN $FB $GOOG $IBM $MSF… http://t.co/qLw0d70kjW
FELICIA BALL
27 Aug 15 18:36:39
RT @CNBC: JUST IN: For the first time ever, one billion people used Facebook in a single day, $FB CEO Mark Zuckerberg says. » http://t.co/L…
The Stock Professor
27 Aug 15 18:35:55
Did 1 Billion People Really Use Facebook In 24 Hours?: [Benzinga] - Facebook Inc (NASDAQ:... http://t.co/9zuyICge6S $FB $TWTR $LNKD $BAC
Jake13
27 Aug 15 18:35:33
FB Facebook, Inc. Exchange http://t.co/FxqDFhIgJa $FB $SGYP $LUV $ASHR #FB #pennystocks #finance
Jim Treacy
27 Aug 15 18:34:56
@SteveKopack He's come along way, killer focus! "Lunch With An Emerging Mark Zucerberg (2006): http://t.co/3hFTMbHVUr $FB #socialmedia
BUD RANTE
27 Aug 15 18:33:13
@CNBC $FB #Mark Zuckerberg time has come.$MYEC https://t.co/XWFs84Vnok http://t.co/uP7KXZaCwi ★ Its a MUST OWN ★ DDRANTE♥ Peace DDRANTE★♡
AiDO
27 Aug 15 18:31:37
RT minyoung_sohn: 😎💬 #AI #DeepLearning #MachineLearning 💻🌇 6 Machine Learning Giants to Watch $AMZN $FB $GOOG $IBM… http://t.co/qLw0d70kjW
AiDO
27 Aug 15 18:31:36
RT aidotech: 😎💬 #AI #DeepLearning #MachineLearning 💻🌇 6 Machine Learning Giants to Watch $AMZN $FB $GOOG $IBM $MSF… http://t.co/qLw0d70kjW
Scott J. Wheeler
27 Aug 15 18:29:49
$twtr $fb https://t.co/KDQ4tPcDGw
aarthi susarla
27 Aug 15 18:29:28
RT @CNBC: JUST IN: For the first time ever, one billion people used Facebook in a single day, $FB CEO Mark Zuckerberg says. » http://t.co/L…
FinBUZZ Just-IN
27 Aug 15 18:28:31
Track trending assets in 1 watchlist $EURUSD $FB $TSLA $USDCAD $USDJPY http://t.co/Xi8ofkFBzk http://t.co/1i7CaJmYtq
Denise Deacy
27 Aug 15 18:26:33
Did 1 Billion people really use Facebook in 24 Hours?!! 😏$FB $SPLK $TWTR http://t.co/gfewoQiTm9
BUD RANTE
27 Aug 15 18:26:25
RT @CNBC: JUST IN: For the first time ever, one billion people used Facebook in a single day, $FB CEO Mark Zuckerberg says. » http://t.co/L…
Eric
27 Aug 15 18:25:27
RT @etfguide: Stock market got you down? Fix what's wrong. Start w/a FREE #PortfolioReportCard http://t.co/JyJhrn6hSu $SCHB $IVV $TSLA $AAP…
totalinvestor
27 Aug 15 18:21:53
1 billion people used #Facebook $FB on Monday http://t.co/tDpPk7oFjn
Jay Jay
27 Aug 15 18:21:38
"@jonmudry $AAPL $DIS $FB $AMZN $GOOG $TSLA $SPY $DJIA $NDAQ I think tomorrow is a day we cool off. We've gone up ~6% in two days."
HelloIt's An N Sh
27 Aug 15 18:21:10
One Billion People Log In to #Facebook for First Time ! #Tech #SocialMedia $FB http://t.co/qbjhXbqKFv
AiDO
27 Aug 15 18:16:13
RT minyoung_sohn: 😎💬 #AI #DeepLearning #MachineLearning 💻🌇 6 Machine Learning Giants to Watch $AMZN $FB $GOOG $IBM… http://t.co/qLw0d70kjW
AiDO
27 Aug 15 18:16:11
RT aidotech: 😎💬 #AI #DeepLearning #MachineLearning 💻🌇 6 Machine Learning Giants to Watch $AMZN $FB $GOOG $IBM $MSF… http://t.co/qLw0d70kjW
BakuTraders
27 Aug 15 18:15:56
RT @hedgefundclone: Top candidates to buy Twitter $FB $GOOGL http://t.co/S3qcWx3SIp via @YahooFinance
hedgefundclone
27 Aug 15 18:15:36
Top candidates to buy Twitter $FB $GOOGL http://t.co/S3qcWx3SIp via @YahooFinance
Christopher Gore
27 Aug 15 18:10:38
RT @tjtaylr: Remember when everyone doubted that $FB would be able to find success on mobile.... https://t.co/ptKTJoBxNq
DontTakeLosses
27 Aug 15 18:09:41
RT @Benzinga: "Engagement levels on Facebook [are] declining. So I won't believe what [Mark Zuckerberg] says at face value." $FB http://t.c…
Dakota Financial
27 Aug 15 18:09:37
Facebook Receives Overweight Rating from Global Equities Research $FB http://t.co/dPt5ufmSCv
				
				
By  +Follow October 16, 2013 9:06AM
Share:

Comments

 

blog comments powered by Disqus

 Today's Must Reads

Welcome to Equities.com's Small-Cap Throwdown


These Analysts Called Apple's (AAPL) Collapse, Here's What They're Saying Now

7 Dow Stocks Worth Owning and a Lot that Aren't

Sprint Turnaround Has Begun


Saving the

Small-Cap Market

 

Small-cap stocks offer investors many benefits, ranging from higher growth potential to overlooked value opportuni... in Equities.com's Hangs on LockerDome

About us

Equities.com is an advanced financial data portal and social network designed to connect self-directed investors with the world’s most innovative startup and small cap companies. Through our in-depth coverage of small cap markets, comprehensive research and stock valuation reports, state of the art issuer products, and world class events, Equities.com provides the social tools and insight that drive tomorrow’s investment relationships and opportunities.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.

Login or Register

LOG IN