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Bubble Watch: Twitter Raises IPO Price By 25%

Tyler Durden's picture




 

Just days ahead of the most-anticipated IPO of the year, and despite the constant calming language from the mainstream media, as the WSJ notes, investors are stampeding into initial public offerings at the fastest clip since the financial crisis, fueling a frenzy in the shares of newly listed companies that echoes the technology-stock craze of the late 1990s. October was the busiest month for U.S.-listed IPOs since 2007, and while 'everyone' is convinced that the Twitter IPO will be different from Facebook, the early exuberant demand suggests otherwise:

  • *TWITTER SEES IPO PRICE $23-$25, HAD SEEN $17-$20

So a 25% rise in the offering price perhas best contextualizes the comments of one broker: "When I hear intelligent investors asking me not which companies are good to invest in, but which IPOs can I get into, it scares the heck of me."

 

But it's not all rainbows and unicorns:

  • TWITTER INC UPDATES RISK FACTOR IN IPO FILING; TWITTER RECENTLY GOT LETTER FROM IBM ALLEGING THAT CO INFRINGE ON AT LEAST 3 US PATENTS HELD BY IBM
  • TWITTER INC - PATENTS SPECIFICALLY IDENTIFIED BY IBM INCLUDED PATENT ON 'METHOD FOR PRESENTING ADVERTISING IN AN INTERACTIVE SERVICE' - SEC FILING

 

But of course, none of that matters - as the flow has to go somwehere, and the VC has to get paid...

 

Via WSJ,

October was the busiest month for U.S.-listed IPOs since 2007, with 33 companies raising more than $12 billion.

 

...

 

The rush to buy shares of newly public companies is the latest sign of investors' thirst for assets with potential upside, at a time when relatively safe investments are generating scant income due to tepid economic growth and Federal Reserve policies that have kept a lid on U.S. interest rates.

 

Many of these companies aren't profitable. But investors increasingly are willing to roll the dice, particularly on technology firms that they say have the potential to "disrupt" the industry.

 

...

 

So far this year, 61% of companies selling U.S.-listed IPOs have lost money in the 12 months preceding their debuts, according to Jay Ritter, professor of finance at the University of Florida. That is the highest percentage since 2000, the year the Nasdaq Composite Index roared to its all-time high of 5048.62.

 

...

 

Many IPOs this year have raised funds to pay back debt to private-equity owners rather than to invest in corporate expansion,

 

...

 

"These are good companies," said John Bichelmeyer, co-manager of the $450 million Buffalo Emerging Opportunities Fund, the top small-cap growth mutual fund by three-year performance, according to Morningstar. "It's just, you're pricing in all the growth on day one."

 

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Mon, 11/04/2013 - 10:52 | 4119236 Max Damage
Max Damage's picture

Ban raises his cock by 25% in a similar way. With the stroke of a pen

Mon, 11/04/2013 - 10:55 | 4119242 smlbizman
smlbizman's picture

this will go up...its in the script...

Mon, 11/04/2013 - 11:33 | 4119348 slotmouth
slotmouth's picture

The TWTR IPO will be the symbolic marker of the top in this most recent equity bubble in the same way as pets.com was to the 1999 bubble.

Mon, 11/04/2013 - 12:20 | 4119454 Running On Bing...
Running On Bingo Fuel's picture

This will go up because your fagbook leader says so. All hail the isrihail.

Over.

For the luv of god! Stop the cross scripting!
http://twitter.com/zerohedge

Mon, 11/04/2013 - 13:38 | 4119646 SafelyGraze
SafelyGraze's picture

doesn't matter what the price is.

10. 20. 50. 100. 200. 500. 1000.

doesn't matter.

all that matters is that the price is guaranteedt o go up.

Q: does that mean it could be priced at infinity?

A: absolutely! 2 times infinity is a return of in-freekin-finity!

Mon, 11/04/2013 - 10:55 | 4119250 Max Damage
Max Damage's picture

Ben even!!!

Mon, 11/04/2013 - 10:56 | 4119245 ManWithaPlan
ManWithaPlan's picture

Just one of the many catalysts for the next financial meltdown...

Mon, 11/04/2013 - 10:56 | 4119246 yogibear
yogibear's picture

Best time to offer any IPO. Fund managers are hungry to buy stocks at any price.

Also a good time to offer stocks with losses. Fund managers will buy them up.

It's like 1999 again. The Federal Reserve has created a stock buying frenzy.

Mon, 11/04/2013 - 11:10 | 4119289 Platinum
Platinum's picture

I remember being a lot younger when the first tech bubble was going on, and even then I realized that something bad was on the way.

I only wish I knew then what I know now about metals, the FED, etc.

 

Mon, 11/04/2013 - 11:21 | 4119313 Zer0head
Zer0head's picture

and something bad was on the way, but ...

timing is everything and a lot of easy money was to be made in the late nineties, just like a lot of easy money was to be made beginning in 2009

if indeed there is no exit for the fed then what are the options?

devaluation is one, right now it is stealth but if/when the vigilantes appear it may have to more formal

Mon, 11/04/2013 - 13:50 | 4119682 Platinum
Platinum's picture

I didn't have the money when the last tech bubble hit, but I remember playing the market in my head - This was before I decided never to buy any as a result of the tech bubble, Enron, etc - I could have earned a lot of money.

Same with gold before 2009.

Third time is the charm.

Mon, 11/04/2013 - 11:41 | 4119358 asteroids
asteroids's picture

Assume the IPO marks the top. What do you do? Go to cash? Short? Buy gold and silver?

Mon, 11/04/2013 - 13:48 | 4119671 Platinum
Platinum's picture

I buy "gold to hold" and "silver to spend". I have a small amount of cash in case things get dicey and people aren't yet used to metal as money.

I have never owned any stocks or bonds. Never will.

Not having to spend much money is another investment. I suggest people invest in solar/wind power if they can. Stock up on gasoline and other fuels (along with what is needed to allow them to be stored safely and without degradation). Food and ammo as well.

I'm following a rule of putting about 20% into metal, 5% cash, 25% fuel/ammo, 25% food. The other 25% covers other bills.

Mon, 11/04/2013 - 12:18 | 4119459 Emergency Ward
Emergency Ward's picture

In the Age of Hope, losses are an asset.

Mon, 11/04/2013 - 10:56 | 4119249 Bearwagon
Bearwagon's picture

Anyone here who knows to which P/E that equates? "Buy of your lifetime" my ass ...

Mon, 11/04/2013 - 10:58 | 4119256 smlbizman
smlbizman's picture

quite.....cramer is on...

Mon, 11/04/2013 - 11:02 | 4119266 Bearwagon
Bearwagon's picture

Could have known ... well, the forest and the trees and all that ...

Mon, 11/04/2013 - 11:03 | 4119264 NoDebt
NoDebt's picture

Why stop at a 25% hike?  There are buyers out there basically with a gun to their head to buy anything that moves.  Double it.

"There is no lid on where this thing can go!"

Mon, 11/04/2013 - 11:02 | 4119268 Trimmed Hedge
Trimmed Hedge's picture

Taylor was freaking out about BBRY

So I bought some at $6.50

Now approaching $7

Thank you, Taylor!

Mon, 11/04/2013 - 11:23 | 4119322 Skateboarder
Skateboarder's picture

Tyler, as in tie.

Mon, 11/04/2013 - 11:02 | 4119269 superflex
superflex's picture

I keeping dry powder for the Pintrist IPO    /s

Mon, 11/04/2013 - 11:12 | 4119299 annabelleballow
annabelleballow's picture

"At the beginning of a bubble the promoters have the vision and investors have the money and at the end of the bubble the investors have the vision and the promoters have the money."  Marc Faber

Mon, 11/04/2013 - 16:05 | 4120072 disabledvet
disabledvet's picture

Facebook is above fifty now (see below) but still easily the worst IPO in history. We'll see about Twitter but couldn't have picked a better time to come out. With Wall Street despising it of course you want it to pop 100% on the open (unlike the Megaphone for Facebook which shows all too obvious who the clowns in the media don't just work for but in fact are.) We'll see...it could be a dud which would be a an omen for a broader market sell off. Have to wait and see but so far it doesn't look that way. I don't think the underwriters will be disappointed that's fer sure.

Mon, 11/04/2013 - 11:51 | 4119380 kralizec
kralizec's picture

Will tank just like FacedBook...just another tool to squeeze resources out of dumbshits...

Mon, 11/04/2013 - 12:45 | 4119536 walküre
walküre's picture

Here's the long awaited IPO of Kamasutra ..... with Indian CEO Jyoti Deshpande (Jay Dipshit) and all..

EROS

http://www.nasdaq.com/markets/ipos/company/eros-international-plc-878575...

Personally, I'm waiting for PORN, FAKE and TITS

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