TIME twitter

Twitter’s Stock Just Hit the Lowest Point Since its IPO

Squawk on the Street
CNBC—NBCU Photo Bank via Getty Images Jack Dorsey, co-founder and interim CEO of Twitter and founder and CEO of Square.

Shares have plunged since company leaders said Twitter is in 'turnaround' mode

Apparently, the weekend wasn’t long enough for investors to forget about last week’s Twitter earnings call.

Shares of the social networking company plunged again on Monday, falling to their lowest point since the company went public in November 2014. Twitter’s stock was recently down roughly $2, or more than 6%, and had fallen below $30 for the first time in over a year. Twitter’s shares briefly touched a low of $28.91, which is as low as the stock has gone since pricing its IPO shares at $26 apiece (though, the company finished its first day of trading at nearly $45).

The market continues to react negatively to last week’s earnings call, where Twitter’s interim CEO, Jack Dorsey, said that Twitter has not done enough to make the platform easier to use and added that attempts to spur user growth have stalled. Chief financial officer Anthony Noto said the company is in “turnaround” and that efforts to ignite user growth could take “considerable” time.

Those remarks sent Twitter’s shares plummeting during after-hours trading last Tuesday, with the stock opening Thursday nearly $4 below where it had closed Wednesday afternoon. The drop actually followed a brief spike in Twitter’s after-hours share price that was brought about by Tuesday’s report of higher-than-expected second-quarter revenue.

Twitter reported a surprising 61% bump in second-quarter revenue last week, helped by a strong advertising business, but profitability still eludes the tech company. Meanwhile, as Fortune’s Erin Griffith pointed out last week, Twitter’s primary obstacle is sluggish user growth and the company’s leadership doesn’t sound too confident that they can wipe out that problem anytime soon.

TIME Ferrari

Ferrari Just Filed to Go Public in the U.S.

Luxury Car Sales On The Rise As Buyers Shed Recession Caution
Joe Raedle—Getty Images

The market debut is planned for early 2016

Fiat Chrysler has officially filed plans to sell up to a 10% stake in luxury auto maker Ferrari in an initial public offering that is expected to be completed early next year.

While the amount of shares being offered and the price range for the IPO haven’t been disclosed, Ferrari did say it plans to list the stock on the New York Stock Exchange, according to a filing with the Securities and Exchange Commission on Thursday. Fiat Chrysler had previously estimated the Ferrari division is valued at about $11 billion, Bloomberg reported, and the stock sale is part of the Italian automaker’s move to cut debt.

The IPO was initially due to occur in June of this year, and was pushed back a few times to deeper in the 2015 calendar. It now appears very likely that it will occur in early 2016.

Though a well-established luxury brand, Ferrari is a relatively small player in the global automobile industry. It reported 2014 sales of 2.76 billion euros ($3 billion), up 18% from the prior year. Net profit also increased last year.

Ferrari’s small volume – it only shipped 7,255 cars last year – is purposeful. The automaker has said it pursues a “low volume production strategy” to maintain a reputation of exclusivity and scarcity among purchases of the company’s cars. Nearly half of the company’s sales are from Europe, the Middle East, and Africa, with another third coming from the Americas. In recent years, Ferrari has shipped more to the Middle East and Greater China and, to a lesser extend, the Americas. Conversely, a lower proportion has shipped to Europe.

TIME Uber

Here’s Another Sign Uber Is On The Road To An IPO

Uber Technologies Inc. Application Demonstration
Bloomberg—Bloomberg via Getty Images Uber is already operating in around 300 cities.

A huge Chinese backer is leading a $1 billion-investment

All signs are pointing to an initial public offering for Uber after reports that a major Chinese investment group is leading their latest funding round.

Chinese fund manager Hillhouse Capital Group is leading an investment in the ride-sharing company that could reach around $1 billion, according to The Wall Street Journal. The convertible bond deal involves buying bonds that can be converted into shares at a discount to the company’s IPO price. The longer it takes for Uber to go public, the greater the return for investors, providing a time-laden incentive for the company to launch an IPO soon. Uber had previously raised around $1.6 billion from the wealth-management division of Goldman Sachs in a very similar deal in January.

The entrance of Hillhouse is also notable for two reasons: The Beijing-based firm is one of the biggest fund managers in Asia, overseeing assets in excess of $20 billion; and Hillhouse’s previous investments in technology firms, such as China’s Tencent Holdings, have paid off.

Working with such a prominent firm also plays well with Uber’s ambitions to go big in China. Earlier this month, CEO Travis Kalanick said in an email that went public that the company’s global team was spending $1 billion on expanding into China, making it the company’s “number one priority”. Uber already operates in around 300 cities.

The deal should also send confusing signals to Didi Kuaidi, the largest taxi-hailing app in China, and, by definition, Uber’s biggest competitor. Hillhouse is also an investor in the Chinese startup, and this latest news will worry them. This comes after tech sites in Asia highlighted a consumer report that Didi Kuadi had experienced more customer data leaks from taxi apps between January of 2014 and May of 2015 in China when compared to Uber.

TIME stocks

Fitbit IPO Hits the Ground Running

Fitbit Chief Executive James Park (C) rings the bell for the company's IPO debut at the New York Stock Exchange on June 18, 2015.
Eric Thayer—Getty Images Fitbit Chief Executive James Park (C) rings the bell for the company's IPO debut at the New York Stock Exchange on June 18, 2015.

Shares of the company jumped as much as 60% Thursday

Apparently, investors think, Fitbit, the maker of fitness-tracking bracelets, is in pretty good shape.

Shares of the company jumped as much as 60% in their debut Thursday, valuing the company at $6.5 billion.

The stock opened up 52%, putting it among the 10 biggest opening pops for an IPO so far this year, according to data from Dealogic (see the chart below for the rest). U.S. burger chain Shake Shack, which went public in January, saw the biggest pop with a 124% gain.

On Wednesday night, the company said it had priced its initial public offering at $20 a share, exceeding its prior estimates. Earlier this week, it said it would likely sell its shares in the $17 to $19 range. That was step up from Fitbit’s initial projections of $14 to $16 a share.

The IPO raised nearly $740 million for the fitness device maker. The deal could generate another $100 million for the company if underwriters exercise their over-allotment option to sell additional shares, which they normally do, especially in a hot deal.

The Fitbit deal has turned out to be more popular than many expected, including the company, which along with raising the price of the deal twice, is also selling more shares than expected. Some observers had feared that increased competition in the wearable device market, especially from Apple, would dampen investor demand for the offering.

But Fitbit’s strong financials likely convinced investors to buy in. Fitbit is one of the few companies to have gone public this year that are profitable. Sales at the company rose 174% last year to $745 million. And investors didn’t seem to be bothered by the company’s use of an accounting metric that seemed to selectively exclude the cost of a recent recall.

Fitbit is the second U.S. wearable technology company to go public, following action camera-maker GoPro hugely successful listing around this time last year.

The stock started trading Thursday morning on the New York Stock Exchange with the symbol “FIT.” The IPO was led by Morgan Stanley, Deutsche Bank and Bank of America.

This article originally appeared on Fortune.com

TIME snapchat

‘We Need to IPO,’ Says Snapchat Founder

Evan Spiegel
Jae C. Hong—AP Snapchat CEO Evan Spiegel poses for photos, in Los Angeles on Oct. 24, 2013.

After declining an acquisition offer from Facebook in 2013, the startup's founder says he has closed the door to all future offers

Snapchat CEO and co-founder Evan Spiegel has revealed the most definitive plans yet about the financial future of his messaging app.

“We need to IPO, we have a plan to do that,” he said Tuesday. “An IPO is really important.”

Spiegel’s comments on stage at the Code tech conference in Southern California, show that he is serious about an initial public offering for Snapchat. The app has made a splash by letting users send photos and short videos that disappear after the recipient sees them.

Although Spiegel teased the audience with the idea of an initial public offering, he remained vague about any of the details. There was no mention of when such an IPO would take place — whether months or years in the future — or how big it would be.

Spiegel swatted away questions about selling Snapchat to a larger company down the road. He famously turned down a $3 billion offer from Facebook in 2013. At the time, Spiegel was called “arrogant” and “foolish.” But he’s since built up Snapchat from a silly app for teens to a media company with large advertisers and partners like CNN and Vice. Earlier in 2015, Snapchat introduced Discover, a separate section in its app where users can consume bite-sized news content from its partner publishers.

On stage, Spiegel also explained that part of Discover’s purpose is to entertain users, in many cases between sending and receiving messages from their friends. The goal of filling up more of users’ time also explains why the company is now moving toward focusing on how long users spend on the service instead of merely the number of them who login. But with that said, Spiegel shared that his service now has more than 100 million daily active users, and that 65% of them — that’s 65 million — send photos or videos every day.

His point was obvious. In his view, Snapchat isn’t just for adolescents sending silly messages.

TIME Shopify

This Tech Company had a Blockbuster First Day of Trading Following IPO

First Day Of Trading for 2015 On The Floor Of The NYSE As U.S. Stock-Index Futures Rise After S&P 500's December Decline
Bloomberg—Bloomberg via Getty Images

E-commerce software company Shopify had a big day after its shares started trading

E-commerce software maker Shopify had a blockbuster Wall Street debut Thursday following an initial public offering with its shares gaining just over 50% in their first day of trading.

The company’s shares gained 51% to close at $25.86, a sharp increase from their IPO pricing of $17.

Investors piled into Shopify early in the day, sending its shares briefly above $28. By the afternoon, the stock fell from its intraday peak but still managed a big gain at the close.

Shopify, which sells software to online merchants to create websites and to process payments, ended the day valued at $1.92 billion. The company raised $131 million in the IPO.

By going public, Shopify joins a small list of other e-commerce-related companies including Etsy and Alibaba that have made their stock market premieres in the past year. Both of those companies, however, have hit turbulence since. Shares in Etsy, the marketplace for handcrafted goods, are now only slightly above their initial pricing after a big initial jump. Shares in Chinese e-commerce giant Alibaba have widely fluctuated since their premiere and are now around the same price as where they ended up on the first day of trading in September.

 

TIME Shopify

This is the Latest $1 Billion Tech Company to IPO

Traders work on the floor of the New York Stock Exchange.
Andrew Burton—Getty Images Traders work on the floor of the New York Stock Exchange.

E-commerce company Shopify will begin trading on the NYSE and Toronto Stock exchange on Thursday

Shopify, the Canadian e-commerce software company, priced its initial public offering at $17 per share late Wednesday, giving the company a valuation of $1.27 billion.

It sold its 7.7 million shares, raising a total of $131 million. It had proposed a range of $14 to 16, up from $12 to 14 earlier.

Founded almost a decade ago in 2006, Shopify provides software tools for online retailers including storefronts, payment processing and apps for checkout. It competes with Bigcommerce and Magento, among others, and previously raised a total of $122 million in private funding.

Shopify filed to go public in mid-April following at the heels of another hotly watched e-commerce IPO, New York-based Etsy [fortune-stock symbol=”ETSY”]. The filing also revealed that Shopify had, at the time, more than 162,000 merchant customers in 150 countries, yielding $105 million in revenue for the company last year.

But despite that, Shopify been losing an increasing amount of money for the last three years. It posted a loss of $4.5 million for the first three months of 2015, and total deficit of $33.6 million amassed over the years. Losses are likely to continue, according to the document.

Shopify also acknowledged several of its risks, including its heavy reliance on resellers to build its business, and that it outsources the processing of its payments to another company, Stripe.

Shares will begin trading Thursday on the New York Stock Exchange under the symbol “SHOP” and the Toronto Stock Exchange under “SH.”

The IPO’s underwriters included Morgan Stanley, Credit Suisse, and RBC Capital Markets, Pacific Crest Securities, Raymond James, and Canaccord Genuity.

MONEY Tech

Fitbit Shows Healthy Profits in IPO Bid

The fitness tracker company has filed for an initial public stock offering, but competition is heating up.

TIME technology

Fitbit Files for $100 Million IPO

Fitbit Fitbit Charge HR

Maker of fitness tracking devices reports big profits

Fitbit, a maker of fitness tracking devices that is being challenged by Apple’snew watch product, has filed for a $100 million IPO.

The San Francisco-based wearables company plans to trade on the NYSE under ticker symbol FIT, with Morgan Stanley, Deutsche Bank and BofA Merrill Lynch serving as lead bankers. Expect that the $100 million figure is a placeholder, rather than the amount Fitbit ultimately plans to raise.

Fitbit reports nearly $132 million in net income on $745 million in revenue for 2014. This is a massive flip from 2013, when the company had a $52 million net loss on $271 million in revenue. For 2012, it was a $4 million net loss on $76 million in revenue.

Quarterly revenue has climbed around 3x between Q1 2014 and Q1 2015, while earnings are up more than 5x over that period (note: around half of Fitbit’s sales come in Q4, due to the holidays). One big explanation for the jump is an increase international sales, while 2013 (and Q1 2014) were harmed by a product recall.

The company also reported selling 10.9 million devices last year, which means that it accounted for more than half of last year’s fitness band market.

From the IPO filing:

fitbit

 

 

 

Fitbit has raised over $80 million in VC funding since its 2007 founding, from firms like Foundry Group (28.9% pre-IPO stake), True Ventures (22.4%) and SoftBank Capital (5.6%), Sapphire Ventures, Qualcomm Ventures and Felicis Ventures.

Co-founders James Park (CEO) and Eric Friedman (CTO) each received around $222,000 in base salary last year, and the equivalent of $7.8 million in total compensation.

Fitbit reports having around $238 million of cash on the books, and $160 million in debt.

This article originally appeared on Fortune.

TIME Startups

Here’s the Major Downside of So Many $1-Billion ‘Unicorn’ Startups

Uber
Getty Images

Billion-dollar startups aren't rare. They're practically a dime a dozen these day—and that's not an entirely good thing

We live in a magical age of unicorns, those pre-IPO tech startups valued at $1 billion or more. And unlike the dot-com bubble, most of these startups are for real. They are companies whose services–like Uber, Spotify or Pinterest–we use every day. You could even say we consumers are the ones that are helping these unicorns to fly.

There is only one problem: Most of us consumers, as individual investors, are being shut out of the party.

These days, you hear a lot of people in the tech-investing world talk about how this is not 1999. The red ink has been washed away by the black at the strongest startups. A confluence of new technologies–the cloud, social networks, smartphones–are creating the mega-brands of the future. As one CEO memorably put it, “It’s the biggest wave of innovation in the history of the world.”

This is more or less true, but another big difference between today’s tech market and the tech market of 1999 is often overlooked: During the dot-com bubble–when most of the IPOs were pipe dreams waiting to crash–individual investors were able to buy their shares freely. Today, by contrast, most of the investments in the hottest tech startups are happening behind the velvet ropes of private financing.

US securities laws set up last century ensured that only accredited investors—currently, people earning at least $200,000 a year or with a net worth of more than $1 million—could buy stocks in private offerings. Those laws were intended to protect smaller investments from the risks of traditional private investments, and they worked for a long time. But recent changes, such as the JOBS Act, allowed private companies to more easily avoid IPOs if they so desired. And most of them have so desired.

The result is that tech companies that would have been open to ownership by everyday people in earlier decades are now open only to the elite. Hedge funds and other institutional investors jockey for access to occasional venture rounds rather than the daily battle of public markets. Corporate insiders have greater control in setting valuations, while executives escape the scrutiny of quarterly disclosures.

And so, unsurprisingly, the tech IPO has become as rare as, well, a unicorn. According to Renaissance Capital, 35% of the companies that went public in 2011 were technology startups. By last year, only 20% of the 273 IPOs were in the tech industry, and most were in the enterprise space rather than the brand names consumers knew. In the first quarter of 2015, only four tech companies went public. And none of them were exactly unicorns.

Three of those four tech IPOs have a history of losses–cloud-storage company Box, online-ad platform MaxPoint Interactive, and domain registrar GoDaddy. Only Inovalon, which runs cloud services for health-care companies, went public with a profit. In the wake of the recession, it was all but impossible for companies to go public with a history of losses but that changed starting last year, when according to Renaissance, 64% of large tech IPOs debuted with net losses, the highest ratio since 2000.

The companies that are choosing to go public aren’t the cream of the crop. Box may have a bright future, but like GoDaddy it went public at the behest of its investors and did so only after months of delays. Box also priced its IPO below its last private round, following late 2014 IPOs like New Relic and Hortonworks that took so-called “haircuts.”

Which brings up another reason for other companies to avoid IPOs–why do it when you can get better valuations in illiquid private markets? True, liquidation preferences and other private perks justify some of that premium, but private valuations are often more art than science.

The pace of tech IPOs are likely to pick up, but few of the candidates in the current pipeline are the highly coveted unicorns. Next week, Chinese e-commerce platform Wowo is expected to raise $45 million. Craft marketplace Etsy is also hoping to raise $250 million in the coming weeks. And mobile software Good Technology aims to list soon as well. All three have steady histories of net losses.

When it comes to the companies with the brightest futures, they are conspicuously absent from the pipeline. Long before the term “unicorn” became popular, CB Insights compiled a list of hot startups expected to go public in 2014. A year later, their list of hot startups expected to go public in 2015 looked suspiciously similar. And now that we’re into the second quarter, there’s little sign that many of them are planning to go public.

Ride-sharing giant Uber, lodging disruptor Airbnb, online-storage pioneer Dropbox, social-ephemeralist Snapchat, social-pin star Pinterest, music-streaming king Spotify, mobile-payments upstart Square–all have been sought after and well funded in private rounds. All have intimate connections to consumers, and would be broke without them. All couldn’t care less, it seems, when it comes to sharing their success with those consumers.

Maybe that’s why they’re called unicorns. Not because billion-dollar startups are rare–they’re practically a dime a dozen these days–but because, for most investors, they might as well be myths frolicking on the far end some of some rainbow.

Read next: Why This Apple Watch Rival Is Very Important

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