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The Masked Tulip

Hpc Twitter Ipo Thread

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I am so excited by the thought of the Twitter IPO this afternoon that I feel as giddy as a Japanese magna character waiting to be rescued by Godzilla from a horde of... OK, maybe not.

12 months ago many of us thought that the Facebook IPO would signal the top of the stock markets.

Now, many are pointing to the froth of Twitter, valued at around 18 billion even though it has not made a penny profit, as being the new height and folly of the stock-market.

Others say that there are more ludicrous Tech 'Social Media' IPOs to come in the next 12 months.

So it will be interesting to see what happens today - IPO at 26 bucks with various analysts saying it will shoot up to 44 - 59 bucks within minutes. Others say that it could do a Facebook and soar before diving down below the IPO price to the high teens. Toss a coin.

In a QE driven market where cash seems to want to find a home...

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If definitely worth something but not sure about $18billion.

Google made an algorithm that could rank relevance of websites. It was so good that everyone wanted to use it and then they could sell relevant adverts next to them in an efficient market made them a ton of money.

The last few years has seen Google's algorithm gamed-to-death. The next big thing is to use "social" data to help organise information (not just sell it remember). Twitter likely have some very valuable information. Google had a great idea and it took them a while to make any money from it.

$18billion though...

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If definitely worth something but not sure about $18billion.

If the share price shoots up to the analysts' average anticipated price today of around 44 bucks it will be worth nearer 35 billion. :blink:

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Opened at $45.10 apparently so lovely profits for the founders and the big banks. Now they have to find someone to flog the shares to.

This values Twitter around 35 billion. Not bad for a company yet to make a dime.

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Pure insanity. Twitter's definitely worth something - but possibly not very much. The trouble is that I tend to regard it as something like a public good which is difficult to monetise/make a profit from. Advertising, sure. But limited scope for that I reckon. Charging for access to the firehose of tweets? Yep - but can't be that many people wanting to pay huge sums for it. I can't imagine the average user paying anything for it.

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What a terrible ipo for those who sold their shares in it. They should have waited another minute and sold them at almost double the price. The mutual funds who bought these shares made almost as much money as the founders and employees who had been working on this for years. The bankers must be laughing all of the way to the bank.

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What a terrible ipo for those who sold their shares in it. They should have waited another minute and sold them at almost double the price. The mutual funds who bought these shares made almost as much money as the founders and employees who had been working on this for years. The bankers must be laughing all of the way to the bank.

Forgive my naivety but how exactly do such IPOs work. How were the various prices set and who got bought/sold shares at what price?

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Twitter has something. Their service is marketed for them by people who want followers, and it becomes worth actual cash to people as they can market their products to their followers easily. Once you get enough followers a tweet will sell your book another X thousand times. So there is real money changing hands due to twitter already.

They also leverage the mobile revolution. They are a standard app now on mobile devices. That is a difficult lead to lose.

It's worth a thought.

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Forgive my naivety but how exactly do such IPOs work. How were the various prices set and who got bought/sold shares at what price?

The sellers are those who owned the stock already (early stage investors, employees, founders etc.). The buyers will be the bankers and those close to the bankers. The price is agreed via consultation between the bankers and the owners - note the conflict of interest the bankers have. Those sellers sold at $26. When the market was opened and free trading could begin, the price was $45, netting the bankers friends a handsome profit. If those sellers had not sold in the ipo and just waited to sell on the exchange, they would have sold for a much higher price.

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The sellers are those who owned the stock already (early stage investors, employees, founders etc.). The buyers will be the bankers and those close to the bankers. The price is agreed via consultation between the bankers and the owners - note the conflict of interest the bankers have. Those sellers sold at $26. When the market was opened and free trading could begin, the price was $45, netting the bankers friends a handsome profit. If those sellers had not sold in the ipo and just waited to sell on the exchange, they would have sold for a much higher price.

Anyone shorting it this morning?

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Guest eight

Pure insanity. Twitter's definitely worth something - but possibly not very much. The trouble is that I tend to regard it as something like a public good which is difficult to monetise/make a profit from. Advertising, sure. But limited scope for that I reckon. Charging for access to the firehose of tweets? Yep - but can't be that many people wanting to pay huge sums for it. I can't imagine the average user paying anything for it.

Yeah, made this same point about Facebook before. It's clearly in some unquantifiable way useful, just difficult to monetise directly. I can foresee it being given some kind of official status.

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Twitter has something. Their service is marketed for them by people who want followers, and it becomes worth actual cash to people as they can market their products to their followers easily. Once you get enough followers a tweet will sell your book another X thousand times. So there is real money changing hands due to twitter already.

Sadly, this bit isn't really true - at least not in my experience (eg retweets by celebs with millions of followers can drive plenty of clicks but single digit sales of even low cost and relevant products). Twitter users are even less likely to buy stuff than Facebookers.

If Twitter could grab the affiliate income from all of the shop links posted, they might make some cash. Interestingly, Pinterest tried this in their early days and users revolted so they stopped. I still don't see how it gets to a valuation of anything remotely like $35bn though - given, probably, the biggest affiliate scheme is Amazon and they are worth around $100bn (and they seem rather over valued too).

Edited by StainlessSteelCat

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As with Lastminute.com, Facebook, and a thousand other IPOs, the real value is not in the core business, but the (so far) unleveraged opportunity to advertise to the customer base.

Although, in the absence of any business sector worth advertising (when compared with the over-hyped stocks of the businesses that (could) supposedly advertise them), I have a niggling suspicion that the valuations are a heap of toss.

It's all a load of w*nk. But what do I know? Build a manufacturing business worth £100m, say, and then value the social network that 'could' (if only it could find a way) advertise that business to its customers, at 1000 times the capitalisation of the business client it 'could' advertise.

And then boost the stock price of the newly-launched social network by spunking the free money from rocketing bond prices (arising from QE) on shares.

This may need some explaining to any mug who actually works for a living.

Who cares as long as astute financial advisers can skim off a handsome % as 'management fees'. It beats work.

BRB, I have some Bitcoin 'profits' to skim. Yeah, I have finally learned to be a c*** too.

Edited by happy_renting

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So, what's twitter then?

I am not in "twitspace" either! :huh:

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.,soap_bubbles_poster-r6624163f521848608834350174efd64d_wh5_8byvr_152.jpg

The Pin calls "bubble" too! I think that's why I chose the Pin name. :blink:

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Sadly, this bit isn't really true - at least not in my experience (eg retweets by celebs with millions of followers can drive plenty of clicks but single digit sales of even low cost and relevant products). Twitter users are even less likely to buy stuff than Facebookers.

People do successfully sell through both facebook and twitter, but there is an art to advertising, you can do it badly. It is usually not enough to show a person a message with a link and then expect sales. You will get some, but it is more effective to use a repeated message to raise awareness of your product and when ready to buy something like your product a person will recall you instead of search for someone else.

Digital goods are another thing altogether and I believe that works better since you can buy it there and then with a couple of clicks.

And for fans of someone like lady gaga I don't believe a tweet about a charity, or a product has no effect at all..? Plenty of petitions etc do better when retweeted about by stephen fry etc.

Its a tool in the marketeers bag, and it has a value.

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30% up! What a short squeeze.

A week or two Yellen warns about social media stocks and... look at twitter go... someone has made a lot of money tonight betting on twitter results and screwing all the shorters.

Didn't it make a loss 3 times the loss of this time last year... or was that of the last quarter... but it had more active users so... YIPPEE!

Might make you think the whole market is rigged?

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