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It really baffles me why the share price is reported as if it means anything at all on its own.
by danhak 13y ago
It really baffles me why the share price is reported as if it means anything at all on its own.
- adwf 13y agoIt's reported because the other big tech IPO recently was Facebook, which went from ~$40 down to ~$20, back up to ~$50. They're trying to provide a reference point to the other major social networking company on the stock market. Of course anyone with a bit of sense knows that it's not the individual share price that matters; but with something as famous as Twitter, that is not necessarily who you are marketing the IPO at.
- encoderer 13y agoIt baffles you? Sure, the price doesn't matter much to a retail investor. But millions of shares will be bought tomorrow at that price so it certainly means something to the right people.
- danhak 13y agoWhich headline do you think is more informative to TechCrunch's audience? Twitter Prices IPO At $26 Per Share or Twitter Prices IPO At $18 Billion Valuation
- afterburner 13y agoBoth are useful and necessary.
- edias 13y agoYes, they are both useful and relevant when used in combination but alone stock price is pretty meaningless. Before Berkshire Hathaway issued a stock split (1 share becomes 2 or more shares) a share was worth ~$172,000. Today Apple trades at $520 and MSFT at $38. Alone those numbers are of no use. You don't know how much the actual company is worth. Share price * share volume = Market Cap. You need to know at least two of those values to make an informed decision.
- pbreit 13y agoThe first since it's is the new bit of information. The valuation is then implied since the number of shares is already known.
- pbreit 13y agoWhat? It means a lot, starting with how much money twitter will raise. Then it suggests a rough valuation (at usually a modest discount) to what institutional investors think the company is worth.
- cdash 13y agoHis point is price means nothing except in the context of how many shares there are, but yet the amount of shares is never talked about only the price. 200 shares at 100 dollars means nothing but 1 million shares at 100 dollars means much more.
- pbreit 13y agoWell, since we already knew the number of shares, the comment made little sense to me.
- jsharpe 13y agoIt reminds me of when athletes' contracts are discussed - "X gets $100 million!" - with no mention of how many years the contract lasts. It matters!
- CyrusL 13y agoThe reason is that the per-share value is best for people who already own or follow the stock. For example, Twitter employees can quickly ballpark the dollar value of their shares with the $26 number. It's also easier for tracking movement (e.g., $20 last week, $26 this week). It's the same reason that all ticker prices are in per-share value rather than market cap. $XOM at $93.22 means less to me personally than "Exxon Mobil is worth $400 billion," but the per-share value is probably most relevant to people with business interest in Exxon.
- raldi 13y agoWell, if you're a Twitter employee with 25,000 vested shares, you probably care more about the share price than the market cap.