So much for that brief Twitter Inc. rally. The
micro-blogging site dropped below its initial public offering price for the
first time ever Thursday. By late afternoon, Twitter shares hit an intraday low
of $25.92 – just below its $26 2013 IPO price. The stock closed exactly at
$26.
Last week, several Twitter insiders, including interim CEO
Jack Dorsey, revealed that they had bumped up their stakes in the
social-networking company, which sparked a rally of nearly 10% in the
company’s stock. All of that has been lost — and then some.
One analyst looks particularly prescient Thursday. Trip
Chowdhry, a managing director at Global Equities Research, wrote in a research
note on the day of the Aug. 10 rally: Sell now. On Thursday, Mr. Chowdhry
said his stance hasn’t changed, and he still expects the company’s shares
to fall between $15 to $18. Twitter’s stock is down nearly 28% this year
(including Thursday’s drop) and is also down nearly 28% since Dick Costolo,
Twitter’s former CEO, announced his resignation in mid June.
Twitter is part of a growing club of companies in a wide
range of industries that have gone public in the past several years — only to
fall below their IPO price. Among them: LendingClub Corp., David’s Tea Inc.,
and Etsy Inc.
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