Sunday, October 20, 2013

Great advice for the Twitter IPO

I saw this great advice for how to think about the Twitter (TWTR) IPO in a San Francisco Bay Area newspaper:
If you're tempted to invest in the initial offering, do it for the right reasons – that you're in for the long term because you admire what the company does and that you have no illusions of making a quick buck.
See:
 
So, yes, I will be in it for the long-term. That also means that I'll think twice about how much to put at risk on opening day and at the market on the open.
 
I've done well with Facebook (FB), but I skipped the opening day, waited a number of months, and got in much more cheaply. That said, nobody expects the Twitter IPO to go as badly as the Facebook IPO. In truth, nobody can predict what will happen. Even if the company and its underwriters do price the IPO "reasonably", nobody can predict how the vast hordes of speculators and traders will react once trading begins. If nothing else, I expect to make follow-on investments whenever any disappointment sets in (any 15% decline from a recent trading peak.)
 
-- Jack Krupansky

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