For the past month we’ve obsessively refreshed the SEC’s website, poured over the filings, devoured the book, and analyzed the social media company to death.
Twitter is the anti-Facebook. Twitter is more expensive than Facebook. Twitter is not profitable, OMG. Its founders are drama queens. It is not transparent enough. It’s weak on international. It is sexist. It has a growth problem. It is a great growth story. It has a mobile problem. It is a mobile company. The IPO is going to be smooth. It’s going to be volatile. Don’t buy it. Buy it.
We’ve compiled video on Twitter’s IPO featuring comments from Twitter investors Bill Gurley, Chris Sacca, John Doerr and Fred Wilson, as well as Evernote CEO Phil Libin, a “mentee” of Dick Costolo, and Instagram founder Kevin Systrom, who worked with Twitter back when it was still Odeo. Check it out:
Today, as the IPO unfolds, I’ll collect all of the day’s news as well as our coverage here as it happens, so check back throughout the day to get the latest.
4:01: Twitter ends the day just slightly down at $44.9 per share. The stock hit its high at $50.09 slightly after opening and then has remained within $4 or $5 of its opening price of $44.10 throughout the day. And that concludes our liveblog. I’ll update later if PandoDaily publishes any more analysis on the day. Thanks for following along!
3:55: The stock is dipping closer to its opening price at $45 as we near closing bell.
3:39: A smooth-going IPO means the news cycle has already moved on to other things. Bloomberg West is covering Disney’s earnings. CNBC is no longer unlocked online for non-cable subscribers. Twitter isn’t even the top-trending topic on Crunchbase right now. There’s a lot more to talk about when things go really badly than when they go just fine — this time of day during Facebook’s IPO we were still obsessively glued to the screen. Not today.
3:30: As an afternoon pick-me-up, here is a completely insane introduction to Twitter for the uninitiated.
3:00: NYSE is taking full advantage of the opportunity to point out its dominance in tech IPOs following Nasdaq’s “egregious fuck-up,” in the words of Reid Hoffman, with Facebook. As of March, NYSE had 100 percent of US tech IPOs for the year. Now it’s got 58 percent market share.
2:45: Shares are holding steady at just over $47.
2:30: Twitter’s employees are still tired.
All these jokers who came in at 6am and were tweeting #BackToWork like it was going out of style are going home early because they’re tired.
— Dana McCallum (@DanaDanger) November 7, 2013
1:30: Alexis Madrigal notes at the Atlantic that Twitter’s impressive 75% price pop doesn’t crack 1999′s top 25 highest first-day IPO gains. “Never forget: This new insanity is smaller and less lucrative than the first Internet boom.”
1:00: Listen to the Wall Street Journal’s Farhad Manjoo and Tom Gara discuss what’s next for Twitter, post-IPO
12:30: Not everyone is a Twitter bull. Analysts at Pivotal Research Group have downgraded the stock noting that, anything much higher than $30 a share is “simply too expensive.”
12:25: This will make your heart explode (in a good way). Fast Company interviewed the nine-year-old Vivienne Harr, who rang the NYSE opening bell on behalf of Twitter this morning, alongside Patrick Stewart and Cheryl Fiandaca, Bureau Chief of the Boston Police Dept. Harr became famous on Twitter for starting a lemonade stand to raise money and awareness to end child slavery. Ringing the bell was “really, really, really cool,” she said. And also this:
“Can I say one thing?” Harr asks me before our interview ends. “I just want to say that today I ring the bell to open freedom. And you don’t have to be big and powerful to change the world. You can be just like me.”
12:12: Investor Roger McNamee on CNBC: Are we too drunk with exuberance? “Who cares? Markets are about buyers and sellers. Right now we have more buyers than sellers.”
As a company, Twitter has had more difficulty translating its success with consumers into revenue than Facebook, Google, or Amazon, but McNamee believes it can drive a large amount of long term value, he says.
12:00: That hour and a half we waited for the stock to list was the longest time to IPO in NYSE’s history. “Flawless open,” an NYSE rep says.
11:46: Twitter’s 73% pop is pretty unusual. The Wall Street Journal points out that it’s the sixth-biggest opening pop ever for IPOs in the US, beating out even Workday from 2012.
11:41: Here’s a fun but fairly meaningless stat!
Twitter currently valued at $137 per monthly active user.
— Alex Wilhelm (@alex) November 7, 2013
11:26: Just in case you thought Twitter execs were popping bottles in stretch hummer limo hot tubs today, they are not. From Twitter’s Chief Revenue Officer:
My first of four client presos today starts in 10 mins. Back at it.
— adam bain (@adambain) November 7, 2013
11:22: Did Twitter make a mistake by leaving so much money on the table? The company’s bankers priced itself at $26 a share, a clearly conservative bet given its opening at $45. As Dan Primack pointed out, that bet is better for the company’s bankers than it is for employees:
Twitter itself obviously wanted a bit of price pop for PR and employee morale purposes, but here’s something else employees could be thinking about today: Had Twitter priced at $45.10 per share and used the extra proceeds to give out holiday bonuses, it would have worked out to more than $580,000 per employee. How’s your morale feel now?
Notably, this doesn’t hurt employee shareholders, because they are not able to sell in an IPO — they have a lock-up period. But it might hurt any venture firms who sold shares in the offering. And it hurts the company, because that $1 billion difference between $26 and $45 a share is working capital it could have had for itself.
10:55: @Jack has spoken.
— Jack Dorsey (@jack) November 7, 2013
10:54: a Vine of Twitter trading via Matthew Keys:
10:51: The opening trades have bid the stock up slightly. “Fairly smooth,” says CNBC’s Bob Pisano. “This is what you want,” says NYSE’s Scott Culter. “The mechanics here are so much better than Facebook,” says Jim Cramer.”
10:50: $TWTR has listed at $45.10 a share.
10:49: We are finally getting close. The last hour and a half has basically been a giant ad for how careful NYSE is in determining its opening stock price for IPOs.
10:43: Important to point out how tiny this float is: Only 1.5 percent, or around $10 million of Twitter’s stock will be for sale to retail investors, which is fueling this giant upward push in pricing. The other $70 million was sold last night.
10:39: We might finally have a price.
— CNBC (@CNBC) November 7, 2013
If Twitter has 544.7 million outstanding shares, which debut at $47 a share, it will be valued at around $25 billion. Google Finance is awesome in that it gets share allocations wrong sometimes. Twitter’s market cap is actually $35 billion. That values Twitter at around 20 times forward sales, which is twice as much as most other Internet stocks, according to Mark Mahaney of RBC Capital Markets (speaking on CNBC). In other words, it’s overvalued. “There have been almost 700 Internet IPOs, and the first day of a stock’s trade usually isn’t that representative of what will happen over the next six to nine months,” he said.
10:25: A meme is born? The bar for finance jokes is lower than for regular jokes, I think.
10:23: The trading floor town crier yells “FORTY-FIVE TO FORTY-SEVEN.” We’re getting a lesson in how the IPO sausage is made here. Scott Cutler of NYSE tells CNBC “It doesn’t look like we’re close” to launching trading. The range of bids needs to narrow down to within one dollar.
10:19: While we wait for the stock to list, here are some highlights from Dick Costolo’s interview with CNBC, transcribed to the best of our ability:
- On how the IPO isn’t as exciting as it seems: “These things can be painted to be a locker room before the game. In reality, it’s a much more lengthy process with lots of papers moving around the table.”
- On Twitter’s conservative pricing: “We have a single class of shares and have tried to have a very clean process. We have a team that has worked very methodically and is just ecstatic about all the work they’ve done.”
- On questions surrounding new user growth: “We’ve had consistent, tremendous growth across the world. Our focus is on bridging that gap between massive awareness of Twitter and deep engagement on the platform.”
- On Twitter’s “niche” status: “There has been an evolution of how users have learned to navigate that 140 space. It can be opaque to users who come for the first time. We need to do that better to drive more use and engagement. Our growth is all about making it very simple and easy for new users to come to the platform.”
- On the fact that Twitter is not profitable: “There is nothing structural about our business that prevents us from achieving margins of other companies in our peer group.”
- On Twitter’s track record of selling ads: “We have the great fortune of working with the biggest brands – who are typically the hardest to get on a platform. We have 94 of the AdAge top 100 working with us at the moment.”
- On whether Twitter’s ads work: “The fact that ads are content first – they’re tweeted out by brands to their own followers — and then then turned into ads, makes them particularly resilient to being spammy and suitable to mobile.”
- On Twitter’s dramatic history: “We have so much more to do and so much work ahead of us. I don’t have any time to look back at the last three years and think about what happened. I can fill all 24 hours of the day with the work we have ahead.”
10:02: The IPO Auction Caller (that’s what I’m calling him) just yelled “FORTY FIVE!” And also, “WE’RE NOT CLOSE!” There’s something delightfully old-timey about the NYSE trading floor.
10:01: Bloomberg interviewed CEO Dick Costolo about a range of things, including decisions on the pricing and amount of shares sold. Listen to the audio from the Q&A here.
9:57: Trades are now up to between $42 and $46 per share.
9:56: Demand is high:
BREAKING: Trading range: $TWTR $40.00-$44.00
— Bloomberg TV (@BloombergTV) November 7, 2013
9:55: San Franciscans are protesting the IPO.
9:45: The opening bell shall be Vined.
9:35: The opening bell was rung by some of Twitter’s favorite users: Sir Patrick Stewart, Vivienne Harr, the nine-year-old girl who made a lemonade stand to end child slavery, and a representative from the Boston Police.
9:30: Opening bell!
— Twitter (@twitter) November 7, 2013
9:27: They’re getting ready (via Julia Boorstin):
9:23: Meanwhile on CNBC, Jim Cramer has declared that this IPO reflects Twitter’s love of democracy. Okay, sure!
9:15: Traders are getting ready for the big moment.
— Chris Dieterich (@chrisdieterich) November 7, 2013
9:22: Bloomberg reports that “Greenmarket traders” will be able to start trading $TWTR as high as $43 per share. Refresher: The company priced last night at $26.
9:10: Twitter CEO Dick Costolo is in New York for the debut, but he’s flying back by 5pm to be with his team after the trading day ends. Memo to Zuck: This is how you do it.
9:06: Officially: The first TWTR trades will happen between 10:30 and 11:00 a.m. Eastern Time.
9:00: Twitter’s stock is “priced to pop,” according to Bloomberg TV commentators and the Tweeting opinionators. The company priced itself conservatively to avoid the disaster that was Facebook’s IPO. Proof of this: Reuters reports that 50 percent of $TWTR has gone to just 10 institutional investors, a high concentration. The IPO was 30 times oversubscribed.
8:40: In case you missed it last night, WSJ dropped a story that’s reminiscent of one of the scandals Facebook dealt with prior to its IPO: Information about Twitter’s IPO has been selectively shared with certain investors but not the world.
8:20: The stock market opens at 9:30 a.m., but TWTR shares might not start trading until around an hour afterwards.
Top images via Anthony Quintano, The rest via NYSE
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