Twitter’s IPO means 1,600 new millionaires in Silicon Valley
Rapid Ratings, a New York firm that helps clients assess the financial health of potential investments, warned that Twitter’s IPO bore the hallmarks of one from the dot-com bubble, given its lack of profitability and rising costs. Indeed, the company’s $23 billion-plus valuation, based on Friday’s closing price, approaches that of LinkedIn, a bigger and more profitable rival.
On the other hand, online brokerage Capital One ShareBuilder reported that the number of new accounts being opened the day Twitter went public was triple the average. CEO Dan Greenshields said most of those accounts were directly related to the IPO.
Demand for Twitter was so high that its underwriters sold an extra 10.5 million shares beyond the 70 million planned, according to news website Quartz. All told, the company took in nearly $2.1 billion.
Analyst Martin Pyykkonen of Wedge Partners was also optimistic, opining in a recent report that Twitter has "at least as promising" an opportunity as Facebook to snare ad revenue over the long term.
One guy who might have reason to feel less chipper after Twitter’s flawless first-day showing was Nasdaq CEO Robert Greiffeld. His stock exchange long dominated the tech scene but suffered a meltdown during Facebook’s debut last year. Overwhelming demand led to a software crash, delayed trading and resulted in at least $42 million in compensation for angry investors.
Nasdaq and the New York Stock Exchange reportedly competed fiercely to land Twitter’s business, which the NYSE ultimately won — in part because CEO Costolo was said to be avoiding the Facebook playbook.
But Bruce Aust, who heads new listings for Nasdaq, took things in stride Friday.
"Honestly," he said, "it’s just one deal."
Follow Peter Delevett at Twitter.com/mercwiretap.