Tweet, Tweet

November 7th, 2013 at 11:19 pm

A lot of what I’ve written here and elsewhere has been pretty negative of late, largely because I’m discouraged by the data flow and its linkage to policy neglect.

So, upon feeling pretty good about Twitter’s IPO today, I thought I should take a moment and say so.  Not like it’s a big, transformative event or anything, or even that I expect it to make a difference re concerns I’ve been expounding upon, but it’s a smart, fun technology, emblematic of our time, for better (fun, glib, insouciant, free, low entry barrier) and for worse (attention deficit, shallow, addictive).

The IPO appears to have gone smoothly, giving the NYSE serious bragging rights over the NASDAQ (re the Facebook stumble).  The numbers are below: shares popped 73% off the IPO price of $26, closing at just short of $45.

I don’t think anyone knows what to make of that price–I heard numerous analysts passionately taking either side today.  And, while I will not slip back into negativity (let’s see what the jobs report has to say in the AM), folks know I think the stock market is overvalued.

But we still have fluid financial and tech markets, where innovations can flourish, proliferate, and raise some serious capital.


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5 comments in reply to "Tweet, Tweet"

  1. purple says:

    Companies rarely use the stock market to raise capital for investment, as has been shown time and time again. For issuers of the IPO it’s a way of getting very rich very fast. For the people who own stocks, overwhelmingly the super rich, it’s a way to make more money they don’t need. The stock market primarily serves as a way to consolidate power and money with the ‘1 %’.

    • Jonas says:

      “Companies rarely use the stock market to raise capital for investment, as has been shown time and time again.”

      Can you point to academic work on this? I’m not disputing the assertion; I’m just curious if it’s more than an assertion.

  2. mitakeet says:

    Something interesting to me that appears to be overlooked by everyone: with the pop in the share price Twitter left at least $1.3 billion on the table (not even factoring in the discounts they no doubt had to give up to get Wall Street to manage the IPO to begin with). Since their goal was to raise $1.8 billion, they wound up losing massively. Who got that $1.3 billion? The inside traders who got the initial deals on the stock at $26/share.

    Life is great for an insider!

  3. Tom in MN says:

    I think this is a first, but I’m going to have to disagree with you here for two reasons:

    1. This is a massive transfer of wealth creating a few new members of the 1% funded by the masses. I see this as part of the inequality problem and I’m kind of surprised you don’t too. Companies that create stuff and make a profit doing it are good for everyone. Pure financial deals just benefit the rich.

    2. Twitter has yet to show a profit. We’ve been here before, 2000 anyone? I don’t think this type of activity is helpful for the stability of the economy.

    • Jared Bernstein says:

      Fair points, for sure. You’ll note my pointing out that this doesn’t solve anything important and I agree re symptoms of larger, structural problems of the type I speak to frequently in these parts. Still, there’s something in there I kind of feel if not quite good, than ok about.