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

By  +Follow October 16, 2013 9:06AM
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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.

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Results for FB
Kewl Dude
31 Mar 15 08:29:11
Short $FB at $85 with a call credit spread. 24% return on the weeklies one week out. Now to watch it play out.
John H Armstrong
31 Mar 15 08:25:50
RT @Weeklyoptions: $FB most probable scenario is it to touch 80's before going on to next leg.
Mexico IPO
31 Mar 15 08:25:40
RT @pennystocksnipe: HUGE OPPORTUNITY --> This course is available again -- http://t.co/YeS9PTVAsO -- #daytrading #stockmarket #forex #equi…
Home Day Trading
31 Mar 15 08:23:03
This is where we're at $KRFT $GENE $TWTR $FB $DANG #HDT #daytrading http://t.co/LCZNov7st2
Mark Pols
31 Mar 15 08:22:59
RT @craigbuj: Over 50% of WeChat + Snapchat active users made a purchase via mobile last month $FB $TWTR $GOOG $WB http://t.co/5TtJpaW57c
Lauren Holmes
31 Mar 15 08:22:43
Other stocks to watch $GENE $FB $GPRO $I $IBM $IBIO $ROSG $VMW $ONCY $FFIV $CLF $EGRX $MNKD. Read our review at http://t.co/huaLsH8iDZ
The Stock Professor
31 Mar 15 08:20:58
Is April the Month to Buy Social Media Stocks?: [at Forbes] - The stock market did what i... http://t.co/IMXZriNOtg $FB $TWTR $LNKD $BAC
Eric
31 Mar 15 08:20:09
$FB looks like it wants to break out of its bull flag
Home Day Trading
31 Mar 15 08:19:53
Así estamos por el momento: $KRFT $GENE $TWTR $FB $DANG Home Day Trading ID skype: HOMEDAYTRADING Twitter:... http://t.co/4843JgZl5H
$COG
31 Mar 15 08:19:20
#toptickertweets $SPY $AAPL $EBIX $TSLA $FXI $USD $TWTR $DAX $FB $COG #sentiquant 20150331 10:00:05:076 … … … … … … http://t.co/ZDQTPJKTaS
Steve
31 Mar 15 08:18:33
RT @craigbuj: Over 50% of WeChat + Snapchat active users made a purchase via mobile last month $FB $TWTR $GOOG $WB http://t.co/5TtJpaW57c
Craig Bujnowski
31 Mar 15 08:18:20
Over 50% of WeChat + Snapchat active users made a purchase via mobile last month $FB $TWTR $GOOG $WB http://t.co/5TtJpaW57c
Bradley
31 Mar 15 08:16:06
Follow me into live stock chat! $GOOG $PCLN $TWTR $FB $AAPL $EBAY $GM $DUST $BABA http://t.co/l9JkTCtpHR http://t.co/uBavWzmcfj
Justin Pulitzer
31 Mar 15 08:13:54
@RiskReversal I don't make much of $FB hesitation last few sessions. She made a new high & hit a range fib ext. Just some healthy digestion.
WLST.com
31 Mar 15 08:13:40
Tech Stocks Vital Data: Apple Inc. (NASDAQ:AAPL), Facebook Inc (NASDAQ:FB), Microsoft ... - TickerLens $FB #wlst http://t.co/7pg0uck45X
Adam X
31 Mar 15 08:13:39
High Probability Trades for March 31, 2015: $CMG $KMI $ROST Interesting charts: $FB $TWTR $CRM $PSX
OptionsGenius
31 Mar 15 08:13:38
$FB most probable scenario is it to touch 80's before going on to next leg.
Alex J Mathews
31 Mar 15 08:13:37
Interesting >> RT @WeavingCapital: Here is a quick snapshot we did today of $FB vs $TWTR at a $50B market cap... http://t.co/Jc8h2EOorA
WLST.com
31 Mar 15 08:13:25
Facebook shows us the future - TickerLens $FB #Facebook,FB http://t.co/S6DviI426U http://t.co/gJIvq7sHgH
WLST.com
31 Mar 15 08:13:20
Tuesday's Vital Data: Facebook Inc (FB), BlackBerry Ltd (BBRY) and JPMorgan Chase & Co. (JPM) - TickerLens $FB #wlst http://t.co/LkC2V0eFEL
Consestimate
31 Mar 15 08:12:32
Technical Charts for Apple Show Downside Risk Below Key Averages. $AAPL, $FB, $GOOG. http://t.co/lErToV4hwq http://t.co/WwAZmmlNLP
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How Viacom Is Attracting Value Investors Intrigued by Turnaround. $VIA, $FB, $GOOG. http://t.co/e65rDVwJun http://t.co/rnJRzPxm5G
TickerLens Facebook
31 Mar 15 08:12:13
Tech Stocks Vital Data: Apple Inc. (NASDAQ:AAPL), Facebook Inc (NASDAQ:FB), Microsoft … http://t.co/WA1SLruGhJ $FB
TickerLens Facebook
31 Mar 15 08:12:09
Facebook shows us the future http://t.co/rDvGfkj4ll $FB
TickerLens Facebook
31 Mar 15 08:12:09
Tuesday’s Vital Data: Facebook Inc (FB), BlackBerry Ltd (BBRY) and JPMorgan Chase & Co… http://t.co/jygXRbDxjr $FB
Justin Pulitzer
31 Mar 15 08:09:39
@peterreznicek Aren't you supposed to be on vacation? Post a pic!! & pick up some $FB before the next leg higher. :)
Consestimate
31 Mar 15 08:07:48
Stocks Settle at One-Month Low as Fed Rate Fears Spark Selloff. $SPX, $FB, $GOOG. http://t.co/z5PJirG4bt http://t.co/Xf5xbxspj1
Consestimate
31 Mar 15 08:07:38
S&P 500 and Dow Erase Gains for 2015 as Dollar Pushes Higher. $SPX, $FB, $GOOG. http://t.co/G8kQ9YHMFW http://t.co/Su1sWreXqs
Keith Keenan
31 Mar 15 08:07:33
$FB 4/10 Weekly 86c/81p strangle at .75 cents is too cheap. The market is discounting a very tight trading range in $FB shs pre-EPS release
AffluenzaVirus
31 Mar 15 08:06:45
BTC $FB Iron Condors at .15 + .43.
Options Edge
31 Mar 15 08:06:36
BTC $FB Iron Condors at .15 + .43.
The Cardiac Kid
31 Mar 15 08:06:33
$FB - 3 Reasons Google Inc. Should Fear Facebook Inc. http://t.co/alph4WuU3F
Pathy Nkondolo
31 Mar 15 08:06:32
$FB - 3 Reasons Google Inc. Should Fear Facebook Inc. http://t.co/ywEKNbTBkG
StockNews
31 Mar 15 08:06:32
$FB - 3 Reasons Google Inc. Should Fear Facebook Inc. http://t.co/Ai7K0StB3y
Solo traders
31 Mar 15 08:06:21
$FB - 3 Reasons Google Inc. Should Fear Facebook Inc. http://t.co/Q54HX4xEDW
john smith
31 Mar 15 08:06:15
$FB - 3 Reasons Google Inc. Should Fear Facebook Inc. http://t.co/Q3OobdgKZ9
Live Stock News
31 Mar 15 08:06:12
$FB - 3 Reasons Google Inc. Should Fear Facebook Inc. http://t.co/xdRWkb60VQ
kay-nea
31 Mar 15 08:05:53
RT @TweakTown: .@htc Vive will build #VR interest among #gamers, company believes $FB http://t.co/Ztf5nNX3Rl http://t.co/Lbiuibh7om
Breaking News Now
31 Mar 15 08:05:03
$GOOG $GOOGL $FB: 3 Reasons Google Inc. Should Fear Facebook Inc.: http://t.co/SV99a0Edf2
Breaking News
31 Mar 15 08:05:02
$FB: Facebook deep analysis before 2015 second earnings season: http://t.co/nC6xx60kaC
royfberger
31 Mar 15 08:04:35
$TWTR $FB $LNKD $MA March 31st, 2015 Watch List - Update from Option Millionaires - Stock Options Chatroom Markets... http://t.co/6i7JVzzQUE
$COG
31 Mar 15 08:03:04
#toptickertweets $SPY $AAPL $EBIX $TSLA $FXI $USD $TWTR $DAX $FB $COG #sentiquant 20150331 10:00:05:076 … … … … … … http://t.co/ZDQTPJKTaS
Dave Bergstrom
31 Mar 15 08:03:03
lil inspiration from @LongTplexTrader with the paint bars! #ES_F bottom on custom indicator today. $SPY $TSLA $FB http://t.co/OBDk74cUju
$COG
31 Mar 15 08:03:03
#toptickertweets $SPY $AAPL $EBIX $TSLA $FXI $USD $TWTR $DAX $FB $COG #sentiquant 20150331 10:00:05:076 … … … … … http://t.co/ZDQTPJKTaS
$COG
31 Mar 15 08:03:02
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$COG
31 Mar 15 08:03:01
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Mike McBell
31 Mar 15 08:02:16
Anyone else notice how similar the @silverpop and @NASDAQ logos are? $mkto $qqq $gpro $loco $hubs $fb $twtr $logo #NASDAQ #automation #logo
Carolyn B Miciano
31 Mar 15 08:01:40
The smart approach to weekly options http://t.co/QQ4hBXlqBf $AMZN $FB $TWTR
Kris Sidial
31 Mar 15 08:01:12
Morning recap: $GENE +.30 ( YES I WENT LONG LOL) $FB +.49 $GBSN -.27
Consestimate
31 Mar 15 08:00:16
Nvidia Technology Will Make Self-Driving Cars a Reality Soon. $NVDA, $FB, $GOOG. http://t.co/2UqBuy7cNV http://t.co/3FFDEDrGSA
				
				
By  +Follow October 16, 2013 9:06AM
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