Coming up with IPO of one’s own company is dream of every organization aspiring to make big. Twitter, one of the leading social networking website had come up with their IPO for 2013 which differed from that of 2012 in terms of public response as well as the offerings. Please visit this site to learn more.
They took every possible step to safeguard the future of their IPO and avoid facing debacle faced by Facebook. To the joy of Twitter, it sold out 70 million shares each of value $26 with things looking rosy for the company. We all agree that this field is highly competitive, yet they have managed to steer clear the initial competition of IPO. Yet Twitter has to put in more efforts to justify the valuation provided by the investors. Here are some points that helped Twitter’s IPO takeover that of Facebook:
1. Twitter’s IPO did not needed banker buying. They did not required their bankers’ aid to trade above its IPO price. It showed on the first day of trading itself with closing done well above it. Comparatively in 2012, Morgan Stanley had to buy Facebook stock to keep its value above $38. If you are interested in trading stocks then check out forex trading in south africa.
2. Twitter’s CEO Dick Costolo took a different route before coming up with their IPO of 2013. He and the company’s founder showed up in lower Manhattan before opening it on the NYSE.
3. Twitter showed up its IPO for 2013 on-time which paved way for smooth trading, thus there was no stock market malfunction.
4. Twitter choose not to upsize its IPO when the demand rose. However they do increased its prices. The company managed to generate $1.8 billion and IPO earned a valuation of $14.4 billion for Twitter. It was tiny in comparison to Facebook, but working well.
5. Twitter is going to hold on the money generated by its IPO and use it for corporate purposes, capital expenditures or save it for any future needs of the company. Thus the profit went straight to the company’s pocket barring the early shareholders. I would say good strategy and very clever! Check out Crypto VIP Club Review to learn more about online money investment.
6. Goldman Sachs was the choice of Twitter as their lead underwriter of IPO. The big silicon valley IPOs have always led by Morgan Stanley but here Goldman Sachs was the company’s preference. Goldman prevented the passing of offerings out of the reach of retail investors and hedge funds.
7. Twitter lost almost $133.9 million in the 1st nine months of 2013. Yet the company choose to show up its IPO at early stage of its growth path. This improves the prospects of Twitter meeting high investor expectations.
8. Twitter’s stock scored big on the IPO day. The shares opened at $45.10 and went up by 75% in morning trading itself. Thus the Wall street fans of Twitter received new constituency. Here it also implies that millions of dollars were left on the table which the company needs to look after in the future.
Despite a smooth start to trading, Twitter is sure to face continued scrutiny as it works to justify a valuation of $31.7 billion to investors sensitive to the nuances of quarterly earnings reports.
“This is a giant poker game,” said Lawrence E. Leibowitz, chief operating officer of NYSE Euronext, as traders and bankers set the opening price in the minutes before Twitter’s stock began trading. “It will be a bit volatile, but it’s a very exciting deal.”
Twitter executives entered the New York Stock Exchange building in Lower Manhattan on Thursday morning as a light rain fell, and the usual mix of tourists and financial workers mingled outside, some snapping photos of the giant Twitter banner draped over the neo-Classical-style building’s facade.
Inside, the floor of the exchange was unusually busy. An hour and a half before the opening bell, traders had staked out positions and a gaggle of reporters had assembled under the bell podium. Twitter’s bird logo was emblazoned on screens and posters throughout the exchange, and even plastered on the hardwood floors.
Mr. Noto, the Goldman banker who led the I.P.O., expressed relief once trading was underway with a tweet that read simply “Phew!”
But some stock analysts were already cautioning that Twitter was overpriced. Soon after the stock began trading, Brian W. Wieser of Pivotal Research, who had a price target of $30 on Twitter before the shares began trading, downgraded the stock to sell.
“With a price that pushes into the high 30s and beyond, Twitter is simply too expensive,” he wrote in a client note. To justify the opening price of $45.10, Mr. Wieser said Twitter would have to report more than $6 billion in annual sales by 2018, compared with the roughly $600 million expected this year.
NYSE Euronext executives said that as long as shares did not fall below the price of the first trade, the day would be viewed as a success. “Everyone will be really happy as long as it closes above the open,” Mr. Leibowitz said. By that small measure, the I.P.O. did not succeed, with shares closing just below the price of the first trade.
But by raising billions of dollars for the company and pulling off a relatively smooth first day of trading, Twitter, its bankers and its exchange have little to complain about.
After the stock had been trading for some time, Twitter’s team assembled outside the N.Y.S.E., braving a pelting rain to have their picture taken in front of the exchange.
“It’s a proud day for the company,” Mr. Costolo said. “But we have a lot of work ahead of us.”