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Tag Archives: lock up

November 14, 2013

Tweet Tweet: Trending Now – IPOs

Twitter’s highly anticipated IPO appeared to go off without a hitch last week. No IPO has had as much buzz since Facebook debuted on the NASDAQ 18 months ago. Although Twitter is getting most of the 2013 IPO glory, did you know that this has been the hottest year for IPOs since 2007?

According to Dealogic and the Wall Street Journal, “Twitter is also riding a wave of strong demand for IPOs. October was the busiest month for U.S.-listed IPOs since 2007, and 2013 is on track to be the best year in terms of the number of deals and dollars raised since 2007, according to Dealogic.

Six companies this year have more than doubled on their first day of trading, the highest amount since 2000. The average one-day pop for U.S. listed IPOs this year is 17%, the best performance since 2000.” Twitter certainly has the advantage of strong market conditions to support the IPO. As I write this, the trend seems to continue with yesterday’s IPO of Extended Stay hotels. They, too, performed well on their first day of trading.

Here are some fun/interesting Twitter IPO facts:

  • An estimated 1,600 Twitter employees became millionaires (at least on paper) based on the $40 stock price a day after the IPO (a flagship day for stock compensation, in my humble opinion).
  • For most employees, a 6 month lockup is in effect, meaning the majority of stock plan related shares will be tied up until May 2014.
  • A small percentage of shares will be permitted to be sold in February 2014 in order to raise taxes for the vesting of restricted stock.
  • On IPO day, Twitter’s Company Twitter page recorded just a one word telling tweet: #Ring!
  • Market research analyst PrivCo calculated potential IPO related tax windfalls of $479 million for California and $1.72 Billion for the IRS.
  • With 1,600 potential new millionaires joining the Silicon Valley ranks, it’s bound to be good for the local economy – anything from real estate to potential cash infused into other new start up companies.

Congratulations to Twitter for claiming the title of IPO darling for 2013.

-Jennifer

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