The Twitter IPO hangover

Twitter’s IPO started with a stunning 72.69 percent on its first day of trading, later slipping down to a mere 7.26 percent. From a whopping $1.8 million to as low as $41.64!

Jon Ogg, the 24/7 Wall Street co-founder stated this as an IPO hangover.

Some analysts said the debut was helped in part by a shortage of Twitter stock, and that most of the 70 million shares were reserved by the underwriters. Twitter is clearly overvalued & priced at 600 times its projected earnings before depreciation and other charges.

On Wednesday evening, November 6, Twitter had set its offer price at $26 a share for the fortunate few subscribing investors. The next morning, Twitter’s stock opened at $45.10, peaked at $50.09 a share, and closed at $44.90, slightly below the opening price.

Twitter’s lack of profits proved to be no obstacle to the micro-blogging site raising as much as $2.1 billion in its IPO. Its current share price of around $41 gives it a market value north of $22 billion.

So now, people who go tweet tweet tweet all the time, cashing out for their share might not be so fast.

Good thing about this IPO? It created nearly 1600 millionaires.

• About the Author

About Shruti Nair

I work with Digital Upstarts as a Senior Copywriter & absolutely love the buzz in & around Social Media & Technology. There was a time when gadgets annoyed me and now I cannot live without getting my hands on the latest ones. Not a freak but the curiosity to know what new have the humans come up with, keeps me glued to the technology that hits the market every second day. I have been doing crazy stuff like selling off the current iPhone to get the latest launch-to-buying gadgets that I might never use. It’s all about satisfaction and sending your curiosity bug to sleep & prepare it to pop up with full energy the next time it hears about something new. For original reviews on technology with some humor hovering around it, keep watching this space!