The hottest tech IPO since Facebook Inc. (FB) got off with a bang on November 6, as Twitter Inc. (TWTR) exploded out of the gate with gains touching 82 percent before settling in at the still impressive 70-75 percent range.
Twitter had taken great pains to carefully manage their IPO, and avoid any stumbles in their highly-scrutinized entrance into the public investment sphere. The company went public at a far lower valuation than Facebook ($14 billion versus $100 billion), and made sure to have fully established the all-important mobile revenue stream tech investors now demand. At the time of their IPO Twitter derived 75 percent of their revenue from mobile, as opposed to Facebook’s zero.
Twitter’s first-day triumph was not entirely unexpected. Analysts tended to be more bullish on Twitter at IPO than they were on Facebook. Equities.com’s IPO expert Francis Gaskins called Twitter a “buy” prior to going public, citing their impressively diverse revenue stream and expected sales growth.
With any stock gap come whispers of a “bubble,” especially with a company that has not once posted a profit. Brian Wieser of Pivot Research has already issued a “sell” on the company’s shares, and hedge fund manager Doug Kass has advised clients to get out of the tech company. But as of midday trading, Twitter had stabilized in the mid $40s range, and seemed to be holding onto its high market valuation.
At midday Twitter was trading at $45.80 a share, representing a 76.15 percent rise over IPO, with over 80 million shares trading hands.
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