back to article Twitter jitters: Investors turn into quitters as shares hit the sh...

Shares in Twitter fell more than 11 per cent today as the six month lock-up period for early investors and staff expired. The end of the lock-up period, restricting the sale of 82 per cent of the company's equity, introduces 470 million shares to the market. It comes at a time when Twitter's share price has been falling off …

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  1. Only me!
    Mushroom

    Is the game up?

    Have people finally worked out companies need to make a profit to actually be worth anything?

    1. ecofeco Silver badge

      Re: Is the game up?

      ...or actually provide something useful?

  2. No Quarter

    Bubble

    Didn't something like this happen in about 2000? And then a bad thing happened.

    Or something.

    1. ecofeco Silver badge

      Re: Bubble

      No nothing bad happened. Your money is safe with us!

      1. Tom 35

        Re: Bubble

        "No nothing bad happened. Your money is safe with us!"

        for certain values of "your".

  3. Anonymous Coward
    Anonymous Coward

    I was under the impression that the "original investors" were the ones who sold/provided the stock for the IPO.

  4. mhoulden
    Facepalm

    Deja Vu

    Twitter's business model reminds me of Deja News from the old days. They also had the idea of trying to make money out of a discussion network (a web front end to Usenet), in their case by trying to turn it into a shopping site with Usenet posts as reviews. At the time "if you're not buying then you're the product" hadn't been coined but that was clearly the idea. However, as they found, a product is only worth what someone is prepared to pay for it. Even with the advanced data mining and aggregation techniques that we have now, there's a limit to how much money you can make by showing people adverts. Eventually Deja News sold off the shopping stuff to one company and the rest of the company to Google, where Google Groups is pretty well hidden unless you go looking for it. Unless Twitter does something different, I can see them ending up the same way.

  5. Mark 85

    Ah... back to the Dot Com Bust Days I See

    "Let's open a website and make a pile of money."

    "Ok. Where's the money come from."

    "We'll let people send messages, call them something cute like Tweets."

    "Ok. Where's the money come from."

    "They can tell their friends what they're eating or doing."

    "Ok. Where's the money come from."

    "They can post cute kitten pictures."

    "Ok. Where's the money come from."

    "Don't worry, people will give us money for this. We'll make a killing on the IPO."

    Ahem... yeah.... and so the stock starts it's downward spriral and some folks seem surprised.

  6. Charlie Clark Silver badge
    Unhappy

    I feel like Marvin

    Depressed. BBC News 24 runs adverts gushing about being the most popular news service on Twitter. All this massive free publicity from hacks using social networks to paper over the cracks of their lack of engagement and commitment to real journalism. And they still make a loss.

  7. Nathan 13

    Twitter

    The most pointless and useless of the current versions of social networking.

    In 10 years time we will not be using any of the current offerings, but Twitter will fade before facebook I feel.

    1. jai

      Re: Twitter

      The most pointless and useless of the current versions of social networking.

      This is the mistake that everyone has made (especially all those who bought the shares).

      Twitter isn't really a social network. That's just a small part of it. It's really a media platform. The real value is not in letting you (the average Joe on the street) tell your friends what you're currently doing in under 140 characters. That is what Facebook is for.

      The value in Twitter is to the celebrities. It's a simple way for them to broadcast messages to their fans, who are all following them, without having to pay attention to what any of those fans are doing, or asking back. And when they have something to sell, it's perfect direct marketing to the precise audience who are going to be buying it.

      I actively use Twitter, reading tweets of people i'm interested in or sites who's news i want to follow. I don't tweet anything myself and only a couple of the people that i follow do i actually know in real life. and none of them really tweet anything either.

      I think there is a real market for Twitter, if used for this kind of thing. and as such, it works well the way that the BBC and even El Reg make use of it. it's almost the inverse of Facebook. But unfortunatley it has been labelled a social network, so everyone assumes it's identical to Facebook.

  8. Destroy All Monsters Silver badge
  9. dave2069

    heres why profits are not required

    Simple, if you OWN shares at market cap of 25B (even though they don't generate profit) then you can get loans from the bank, against this "Asset" probably at about 3% APR. you can then use this money to invest, spend, offset debts or buy real companies. Every one involved agrees that the shares are worth that initial 25B, and if some are sold at this rate, then that's proof enough. If you pay the finance house that manages the sale a few hundred million, they will price you high, and keep you there.

    You can now lend to Greece for 8% APR return, if you can think of anything else to do with the cash

    Everyone wins, 25B is magicked out of the air, real profits come in from the APR differences, and no one loses. genius........ ok someone somewhere loses eventually, maybe..

    1. Pascal Monett Silver badge

      "Every one involved agrees that the shares are worth that initial 25B"

      Not any more.

  10. ForthIsNotDead

    Er...

    Simple, if you OWN shares at market cap of 25B (even though they don't generate profit) then you can get loans from the bank...

    Or you could have kept the cash to begin with, rather than, you know, "investing" in a company that doesn't make any money.

  11. ForthIsNotDead

    Common Sense

    If they're not making a profit, then they HAVE to go back to the market for another round of share issuing, since that's the only place they can get their money from. Thus if you own shares from the original IPO, they are going to be de-valued as more shares hit the market.

    This seems to be de rigueur these days. The people at the top enrich themselves via the IPO, rather than by selling stuff and making a profit. Eventually, when the share price heads south, the board will fire them, and they can feign disappointment whilst accepting a huge golden-handshake cheque and they're done. Then all they have to do is wait for the share sell ban period to elapse, and they can then start quietly selling their millions of privately held shares (assuming another member of the board hasn't approached them and made an offer for them at a pre-agreed price).

    They've got balls. Gotta give 'em at least that much.

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