Let me tell you about a billion dollar company. The company is called Loudeye. It had a huge IPO party in Seattle with bands, a James Bond theme etc., gifts f

Let me tell you about a billion dollar company. The company is called Loudeye. It had a huge IPO party in Seattle with bands, a James Bond theme etc., gifts for each guest. The IPO price was $16, it soared the first day to $40. The market cap at the end of the day was $1.4 billion. They had 200 employees, $2.7 million in revenues, but had losses in the millions. They IPO'd in mid-March 2000. The tech market almost immediately began collapsing the next day. The founder used to give interviews during the so-called quiet period. A shareholder class action lawsuit argued the prospectus was false and misleading. They sold to Nokia for $60 million in 2006. $60 million, not $1400 million. I guess people remember the last time around when companies losing money instead of making money IPO'd. On an individual level, it's hard to predict if Twitter will do well or not, but on a general level it's safe to say that companies large enough to IPO are generally safer when they're making money as opposed to losing money.