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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.

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.


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Results for FB
Daryl Shaber
2 Sep 14 19:11:43
RT @stockwire24 Facebook Inc (NASDAQ:FB), 2 Others Catch Wall Street's Eye: http://t.co/N1wS3eDvY0 ... $FB http://t.co/nSc4DHHM39
Evener Investment
2 Sep 14 19:10:03
RT @IBDinvestors: Facebook and 5 Chinese Internet stocks with revenue growing more than 50% http://t.co/h5QQAa5SBJ $FB $BIDU $BITA $ATHM
LilyFlor
2 Sep 14 19:09:59
RT @chessNwine: I analyzed $FB $ISNS $TSLA and much more in my video market recap from earlier: http://t.co/f0u1p6w8z0 $SPY $TWTR
Swing Trade Alerts
2 Sep 14 19:09:30
IBD:Facebook and 5 Chinese Internet stocks with revenue growing more than 50% http://t.co/6gfx7DmEZC $FB $BIDU $BITA $ATHM
Jo Ann G.
2 Sep 14 19:09:26
RT @IBDinvestors: Facebook and 5 Chinese Internet stocks with revenue growing more than 50% http://t.co/h5QQAa5SBJ $FB $BIDU $BITA $ATHM
Chess
2 Sep 14 19:05:59
I analyzed $FB $ISNS $TSLA and much more in my video market recap from earlier: http://t.co/f0u1p6w8z0 $SPY $TWTR
Brett Carneiro
2 Sep 14 19:05:34
RT @IBDinvestors: Facebook and 5 Chinese Internet stocks with revenue growing more than 50% http://t.co/h5QQAa5SBJ $FB $BIDU $BITA $ATHM
Investors.com
2 Sep 14 19:05:09
Facebook and 5 Chinese Internet stocks with revenue growing more than 50% http://t.co/h5QQAa5SBJ $FB $BIDU $BITA $ATHM
Timothy Sykes
2 Sep 14 19:01:24
Thanks to all my $FB $TWTR $LNKD peeps for the kind words, all these runners today like $DGLY $ISNS are classic cases of my strategy
Market Headlines
2 Sep 14 19:00:53
$FB: Facebook Inc (NASDAQ:FB), 2 Others Catch Wall Street's Eye: http://t.co/M7wmssXwD3� http://t.co/u0S6f2HVVX http://t.co/9YLbRyh2VV
Stock Wire
2 Sep 14 18:58:49
Facebook Inc (NASDAQ:FB), 2 Others Catch Wall Street's Eye: http://t.co/NtN5QUOzF3 ... $FB http://t.co/JFf8Hhca4h
Alexander Lee
2 Sep 14 18:57:41
Watchlist: $DGLY $JRJC $ISNS $VII $FOLD $EVRY $OTIV $FNSR $SPLK $INO $RALY $SPWR $CTRP $UA $UAL $FB $TOUR #daytrade #stocks
Henry@R-investing
2 Sep 14 18:57:29
6 Top Internet Stocks With Booming Growth http://t.co/MVbTLHDNi8 #IBDNews via @IBDinvestors $BITA $LAS $ATHM $BIDU $FB $YY $QIHU $LEJU
JSA
2 Sep 14 18:57:05
successful vacation .. = did not log into $twtr or $fb once
natetrades
2 Sep 14 18:49:43
$FB started a position today. $76.74 is the magic number. https://t.co/Pp3QCl0ukE via http://t.co/eJgBzSEGxE
BUZZ Just-In
2 Sep 14 18:48:02
Track curated news and tweets for multiple tickers- Social Media Stocks http://t.co/ajElRTb2Qc $TWTR $LNKD $FB $GRPN $ZNGA
PennyStock Zone
2 Sep 14 18:42:56
Timothy Sykes Penny Stocking Silver Alerts Review http://t.co/QvXwwQkoVR #stocks #trading #nyse #nasdaq $FB $TWTR $RCON $XGTI
IntelligentSpec
2 Sep 14 18:41:44
$FB as an ecosystem on top of Android and iOS - http://t.co/0wBm8yDZDe
Accessatrader.com
2 Sep 14 18:40:48
RT @danshep55: Video going out 1hr . Good 2 way action with stupidity at highs lol http://t.co/tzn5UzFYgb $fb $isns $dgly
YourPersonalTrader
2 Sep 14 18:38:38
To all that said 'Momo Growth' stocks are 'Spring' dead,.via http://t.co/BReJnByjwt $FB $TWTR $TSLA $PANW $FEYE $BIDU http://t.co/rV00g03gJu
Mark Romero
2 Sep 14 18:37:42
“@IBDinvestors: Check Out 6 Top Internet Stocks With Booming Growth http://t.co/UStVhjLJjZ” $BITA $ATHM $FB $GOOG $BIDU
Leilani Pips
2 Sep 14 18:35:00
RT @SKITHEG: @PipsToDollars geez I guess I really dont like $fb long term. Its a dying social media site. Once the older generation gets a …
Ski The G
2 Sep 14 18:30:53
@PipsToDollars geez I guess I really dont like $fb long term. Its a dying social media site. Once the older generation gets a hand on it
PennyStock Zone
2 Sep 14 18:30:49
Multimillionaire trader SUPERTRADES and his EASY to replicate strategy can make you money! http://t.co/Ho9ydXHTWl $HURC $RCON $FB
Ophir Gottlieb
2 Sep 14 18:30:10
$FB This is Why FB is a $200B Firm, Larger than $IBM and at an All-time High http://t.co/0p2eYPoxme
César Segovia
2 Sep 14 18:30:10
$FB esta apunto de establecer nuevos máximos históricos... si veo una buena configuración mañana lo operare al alza http://t.co/b0HYCJnZHd
Joshua Hayes
2 Sep 14 18:30:09
Small Caps Rally; NASDAQ Volume Explodes http://t.co/7RcUU6nshM $STUDY $RUT $IWM $COMPQ $QQQ $FB $TSLA $SPX $SPY $DJIA $DIA
CandidBanter
2 Sep 14 18:29:19
$FB - Right at all time high, up 2.49% today -- http://t.co/CI2K8Vx5Ds http://t.co/Vomne4Ku4S #stocks #trading
Maximus Analysis
2 Sep 14 18:28:27
Video: http://t.co/7SaZZdfrIy $AAPL $NFLX $MSFT $XOM $FB $TWTR http://t.co/lUE7UsHDUQ
Stewart McGehee
2 Sep 14 18:26:39
$SPY. Significant movers in the portfolio today. $REGN $SYNA $UA $UBNT $FB $TWTR!
The LincolnList
2 Sep 14 18:26:12
Here are a few stock ideas for tomorrow $FB $ISNS $CTRP $EFUT http://t.co/gpFyusmcTG
Russell Barbour
2 Sep 14 18:25:10
50% SALE on PROFITLY guru subscriptions! check it out! http://t.co/wOMl6j9XJB awesome value! NS $FB $IDN $BIDU $DGLY $HPJ
Financial Headlines
2 Sep 14 18:20:37
$FB: What Twitch deal says about Amazon's ad ambitions http://t.co/54arEgO9vQ http://t.co/E0spaSIEi9
G. T. HALL
2 Sep 14 18:20:01
Check Out 6 Top Internet Stocks With Booming Growth http://t.co/oDPQC6TqNP #IBDNews via @IBDinvestors $BITA $LA $FB $YY $GOOGL $QIHU $LEJU
Andrew E.
2 Sep 14 18:19:30
$FB is nearer to being a web browser. Saved links function is a bookmark service. Just need a better search engine and this is the new deal.
Mark McCabe
2 Sep 14 18:19:21
Commented on StockTwits: nobody knows "when" but many are confident that it will get there. $FB 100 PT on Mad Mon... http://t.co/rEUdMyYWqz
Active
2 Sep 14 18:16:09
RT @Pharma_Trader: Another American beheaded by #ISIS #PUSSIES - Time to get the sniper rifle out again... $FB $TWTR
Rubi Gaddi
2 Sep 14 18:13:56
RT @om: Looks like $FB closed at an all time high of $76.68 with market cap of a whisker below $200 billion (via @freddymini) http://t.co/0…
phil fratantonio
2 Sep 14 18:12:42
@jimcramer nice charts tonight on Madmoney. I like $FB $TSLA and $ UA. Great to see $REGN breakout tonight. $BIIB is next. $GILD aworkhorse
Russell Barbour
2 Sep 14 18:09:38
50% SALE on PROFITLY guru subscriptions! check it out! http://t.co/wOMl6j9XJB #stocks #trading $FB $nasdaq #nyse #money
BUZZ Just-In
2 Sep 14 18:03:00
Gain from movement in these buzzing assets $SPX Dow Jones $FB $Nasdaq $AAPL http://t.co/Ox8QGkVtrR
Ian Nelson
2 Sep 14 18:02:53
RT @Taarriqq: $GPRO $TWTR $FEYE $FB we decected institutionals flow b4 anyone else, posted last week, kept paying till today http://t.co/U…
PennyStock Zone
2 Sep 14 17:55:59
Replicate multimillionaire strategy easy to copy! Subscription is cheap at twice the price! http://t.co/Q6vtkuSPbk $HURC $FB $CAMT
Russell Barbour
2 Sep 14 17:55:15
Multimillionaire trader SUPERTRADES and his EASY to replicate strategy can make you money! http://t.co/jaeaMQhT8u #stocks #trading $FB
DanFitzpatrick
2 Sep 14 17:54:32
Here's my take on $TSLA $FB and $JCP http://t.co/rn5dMippPj My sincere thanks to @jimcramer for featuring my work.
Mark McCabe
2 Sep 14 17:54:12
@Taarriqq what do you think of $FB technicals now after today's move ?
YourPersonalTrader
2 Sep 14 17:51:18
$AVGO NCHi, YPT pick off EPS @$38 to $85 /1yr as $AAPL #iphone play via http://t.co/W8ChtHjgMA | $SPY $QQQ $FB $TWTR http://t.co/Mtl9yHpPaR
Claus
2 Sep 14 17:49:09
$FB picking up steam, all time closing high https://t.co/7KZGBvetzu
BUZZ Just-In
2 Sep 14 17:47:59
Transaction costs for trading $FB with brokers, min: 0.089% max: 0.194% difference: 1x http://t.co/ikQa2dNpeS #spreadbetting
Martin Lorentzon
2 Sep 14 17:46:39
RT @om: Looks like $FB closed at an all time high of $76.68 with market cap of a whisker below $200 billion (via @freddymini) http://t.co/0…
				
				
By  +Follow October 16, 2013 9:06AM
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