The other social network giant, Twitter, is making an Initial Public Offering (IPO) on November 7, 2013 on the New York Stock Exchange (NYSE) and intends to become a publicly traded company. Twitter has more than 230 million subscribers at this time. It is expected to raise $1.6 billion which is equal to one tenth of what Facebook raised with its IPO more than 16 months ago.
Many of us still remember the fiasco that Facebook made on its IPO date. Twitter is hoping to avoid Facebook’s mistakes and only offering 10th of the size of Facebook for the IPO. This will value Twitter at $11.1 billion as a company.
Investors should learn a lesson from Facebook IPO. The IPO price of $38 a share for Facebook went down immediately after the IPO and it took more than 16 months get the stock up to the IPO price. One strategy an investor can use is to buy only one-half of the intended purchase at the time of the IPO and wait until the price to stabilize to buy the other half. As with any hot tech IPO, it may be difficult for individual investors get in on the IPO action.