
LIVE: Twitter IPO - daraosn
http://techcrunch.com/2013/11/07/watch-twitter-ipo-event-live-nyse/
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sz4kerto
The indicative $45-47 opening price finally convinced me of getting out of
(tech) stocks in general. We're talking about $20B valuation for a company
which has never made money. I know "this is different", and it has a lot of
users, and so on.

Still, I'd be cautious.

~~~
sheri
Maybe I'm old, but I'm still struggling to figure out if Twitter is a short-
term fad, or a serious here-to-stay concept (and thus a company) in our lives.
I like to imagine say a 10-15 year time frame, and if I think the company will
still be around then.

Netflix, for example, at least has a business model which I see becoming
pervasive 15 years down the line (on-demand entertainment over the internet).
Of course I don't know if Netflix will be the company to dominate that
business model 15 years down the line.

With Twitter, I am not yet convinced this has long-term value here, but maybe
I don't get the value it has in other's minds.

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larrys
I'm on the side of no long term value.

(Not to mention that even if it is long term can it be profitable.)

The reason I think "no long term" is that in it's current incarnation it
doesn't hold value for "normals" other than people who want to follow
celebrities or of course the tech crowd. Or are obsessed with knowing the
moment there is an earthquake on another continent. That's essentially
entertainment. It's not something you need to know (in masses of course there
could be individuals that need to monitor those things.)

I mean sure it is useful to be notified of some event that happens but
personally I don't think the need for that is greater than the current
alternatives of getting that information (or that a better way to get that
information wouldn't be developed).

Most employed people with "regular" jobs are not all obsessed with twitter and
the information that it delivers.

Netflix, otoh, delivers a product that people have received for many years by
a better method. And the money making part is baked right into the product.

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the_watcher
>> The reason I think "no long term" is that in it's current incarnation it
doesn't hold value for "normals" other than people who want to follow
celebrities or of course the tech crowd.

Do you watch CNN? Do you follow breaking news? Then Twitter has demonstrated
value for "normals," as it's become the best platform for breaking stories
(for better or for worse).

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recuter
I for one do not watch CNN and don't know anybody who does outside of an
Airport or hotel setting.

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the_watcher
I used CNN as a catch-all for "news." Sub in whatever you use. ESPN, Fox News,
NBC, BBC, whatever. All of them use Twitter extensively.

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recuter
You are not helping your point.

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the_watcher
I disagree.

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dangrossman
A $45 market price after a $26 IPO means Twitter left over $1B on the table,
doesn't it? They would've had that money, instead of the first investors who
can now immediately sell the shares at a huge profit, if the initial price was
set closer to what the market would've paid.

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Osiris
A question: In an IPO, does the company have to sell every share for the same
price? As in a typical market, the price fluctuates based on demand. Couldn't
they evaluate the demand for the shares and adjust their sell price higher to
compensate, or is it part of the legal framework that they are required to
sell all the shares at exactly the same price?

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mmahemoff
Google tried to pioneer a Dutch auction IPO when they went public in 2004.
Buyers would make bids for an amount of stock, and somewhat bypassing the
banks, but it was less than successful.

The idea has never taken off, not yet anyway. It seems the banks still play an
important role in marshalling large funds, and there's apparently significant
benefit from a "hot" stock gaining on day 1 (albeit irrational).

~~~
the_watcher
I thought that it was mainly successful for Google, but that it was Google
being such an insanely in demand stock that led to the success, not the
auction itself. Basically, a Google IPO couldn't really fail. I do know that
the banks hated it, and the only reason Google got away with it is because
Larry and Sergey couldn't have cared less.

~~~
mmahemoff
A Google IPO was always going to do well, which is part of the reason they
felt they could take a gamble like that. But the stock doubled in 60 days [1],
so "eBay for IPOs" didn't create anything like a perfect supply-demand
scenario. Maybe it would be different now.

1\. [http://www.marketwatch.com/story/google-ipo-has-doubled-
afte...](http://www.marketwatch.com/story/google-ipo-has-doubled-
after-60-days)

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Tarang
I know lots of people are against twitter because they're not yet making any
money.

The thing about market prices on any market is that the price doesn't reflect
what they're doing now. This isn't something thats 'different', it applies to
everyone. It reflects what we all perceive they're capable of a couple of
years from now.

I think twitter has a lot of potential because its something so simple and you
would find an older audience more engaged in it. Quite simply put, people love
it.

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tomkin
I'm incredibly ignorant when it comes to the stock market. But why would any
company elect to go public? Let's see: you lose your creative edge 90% of the
time, you destroy the relationships with your users 50% of the time, your team
vision becomes one that must equate to profits - forever. This is not natural
- to be constantly growing and profiting. Small businesses (you know, the
millions of them) seem to hold their ground better in turbulent times, despite
their lack of hand-over-fist profits.

This idea of unlimited growth is unsustainable and people who can't see that
are just as bad as a 2008-era stock broker as far as I can see. It's a very
willing and eager group of apologists and utopian dreams. Honestly.

~~~
pachydermic
You get to turn pieces of paper which say "I own x% of TWTR" into pieces of
paper which say "I own $y". A lot of people are happy to make that trade,
_especially_ if they don't think their ownership of the company is worth the
amount of money that people are willing to pay for it.

As for the people who actually just work at Twitter, or who run Twitter? Well,
you certainly get a lot more money to work with so long as your stock price
doesn't collapse. You no longer have to go lobby certain individuals for money
as much as you used to. Sure, you have to focus on making profits now, but
that was always kind of the point, right? That doesn't mean you have to be
short-sighted. Just look at a company like Amazon for an example of how a
patient company can still command a high stock price and respect even when
they're not pumping out huge profits.

Also, the vast majority of small businesses are abject failures. Most economic
growth occurs through the activity of massive corporations (from the business
side of things).

At least, that's my understanding. Feel free to point out if I'm full of shit,
please.

~~~
alphaBetaGamma
Actual, a lot of economic activity comes from small businesses: about half the
US GDP is generated from companies with less than 500 employees.

[http://en.wikipedia.org/wiki/Small_business#Contribution_to_...](http://en.wikipedia.org/wiki/Small_business#Contribution_to_the_economy)

~~~
pachydermic
Interesting - although it's worth pointing out that it's about half of
_private sector_ GDP, not half of US GDP. Also, I'm not sure I'd call a
business with over 100 employees "small", but I guess that's the definition
they're going with.

Here's the full PDF of that source:
[http://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf](http://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf)

Also, while they're a government agency and cite their sources, their job is
to advocate for small businesses. Does anyone else have more sources to look
at?

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jstalin
A particular quote from P.T. Barnum comes to mind...

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larrys
I've always noticed that there is sometimes a correlation between those that
make money and those that can understand what a "sucker" will go for.

What I mean is that many people make money by understanding the stupidity of
people and taking advantage of that.

As opposed to thinking all logically with intelligence as far as why would
someone pay me to do that! It's so simple!

An example of this (that might hit home to the tech crowd) is a "tech guy/gal"
who under prices what they do thinking it is simple to install open source
software on someone's box. Instead of realizes that to a "normal" it's a big
ball of confusion and they would be quite pleased to just have an installed
turnkey product with 5 minutes of handholding.

I can't stress this enough. You get paid for what you know that someone else's
doesn't know. And you deserve to. So don't give it away without getting paid.

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ChristianMarks
Twitter's IPO will ensure that it no longer plays a role in world events.

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ketralnis
How does that follow?

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ChristianMarks
It doesn't follow, actually. It is my guess that the IPO will lead Twitter to
temper its willingness to serve as a communications medium for events like the
Arab Spring, but I could be mistaken--even sadly mistaken.

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nicholassmith
That's up an enormous amount now, looks like the problems which plagued the
Facebook IPO launch were dealt with long in advance.

~~~
gcv
Facebook was Nasdaq. Twitter is NYSE. Wouldn't have the same problems.

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yannisp
Regarding the profitability piece, they closed their mopub acquisition this
week - something i believe will make or break the future of TWTR reopvenue...
I believe the money is on that piece to perform or the company is dead in the
water.

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the_watcher
MoPub is the key for Twitter, I agree. It offers them a way to jump in as the
leader in multi-touch/multi-device attribution, something that marketers will
pay through the nose for (I know I would). I'm really interested to see what
they do with it.

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nicholassmith
It's not relevant to the price, but they had Patrick Stewart open the market
with them. Well, having Captain Picard open the market shouldn't be relevant
to the price anyway.

~~~
joosters
Who knows? Maybe some algorithmic trading program has factored it into the
price?

~~~
muns
Computer says no:

[http://twitteripo.knowsis.com](http://twitteripo.knowsis.com)

