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Doesn't that mean the company missed out on about half its value?
by jsprogrammer 10y ago
Doesn't that mean the company missed out on about half its value?
- triangleman 10y agoYep that's called money on the table.
- jonknee 10y agoNot really, they only sold a small percentage of the company in the initial offering.
- jsprogrammer 10y agoStill looks like ~$100,000,000 was missed.
- whatok 10y agoDefine missed in this context. Missed to means they had an opportunity to sell those 10mm shares @ $23.99 elsewhere. I don't think that would have been remotely possible.
- jonknee 10y agoThe conventional logic is that you don't want to try picking up nickels in front of a steamroller by pricing your IPO too high and having it sag out of the gate. You want demand for the shares and then let the market price them. If Twilio had priced their shares at $24 they almost certainly wouldn't have sold them all and it would have been a really ugly IPO that resulted in a lower total market cap. tl;dr sentiment is very important for IPOs
- tomp 10y ago> sentiment is very important for IPOs Who cares. Compare Twitter ("popping" IPO) vs. Facebook ("sagging" IPO).
- whatok 10y agoI don't see the point in comparing the two but if you want to, Twitter had much better near-term post-IPO performance than Facebook did. We all know what happened after that. It's almost as if during a period where little fundamental information is available (post-IPO), something else must be driving trading (sentiment), while when more fundamental information is available (first earnings report), fundamental information plays more of a role.
- jsprogrammer 10y agoBy selling at $20, they would have picked up another $50 million. Probably, GS and JPM got a lot it instead.
- jklein11 10y agoEh thats kinda hard to say. Looking at the quoted price of a stock is a little bit misleading without looking at the Bid and Ask volumes. Currently the bid of ~1000 shares are available at 24.97 (these number will vary second to second) That doesn't mean that all of the shares IPOed could have been sold for that price. Was there likely money left on the table? Yes. But its pretty difficult to put a dollar amount to it.