Twitter is targeting this Thursday morning as the trading day for their much awaited and talked about IPO, or initial public offering. They will set the price, estimated between $23 and $25 Wednesday evening. This is more than the $17-$20 originally estimated. This will raise about $2 billion, at the high end. They are offering 70 million shares, indicating a market value as much as $13.6 billion. Their symbol is TWTR on the New York Stock Exchange. Opening bell at 9:30 am.
By industry accounts, this IPO launch is probably the most anticipated since Facebook last year. If you feel you missed the boat on Facebook (FB), don't worry. You can buy up the stock on its way down or up, depending on your risk tolerance and ready cash. It was trading at $50.10 at the time of this report.
INVESTING STRATEGY FOR THE NEWBIES!
Investing in stocks can be fun and rewarding. I would, however, caution, NEVER to use your life savings, emergency fund or funds you don't have. Investing is also NOT for the faint hearted. Stock picking is a game of strategy AND lifestyle. Don't pick stocks in an industry you know nothing about. Speculative investing is a dangerous practice, if you don't know what you are doing.
I have been investing in Technology stocks since 1987, BUT I don't own a lick of shares in Microsoft. I pick what interests me (Facebook), what I use (Apple) and bank on innovative companies (Google) that keep pushing the envelope (Samsung).
Stock picking is part strategy, part lifestyle and a whole lot of patience. I am not a day trader. I sit on my shares for the long haul, occasionally selling for other gains (real estate). I always use money I will NEVER miss. This discipline was the BIGGEST lesson I have ever learned because anyone who has traded will tell you that you WILL LOSE MONEY, somewhere in the process, GUARANTEED!
The great thing about free falling stocks, i.e. Facebook (FB) last year, is you CAN buy MORE of it on the way down. I bought it at $40 and bought some more of it at $24. I am NEVER glued to a stock's day to day performance. I am in-tuned with the company, their business model and executive leadership. I am banking on the people behind the ticker NOT the stock, itself. A company's valuation is also critical to my bottom line.
Contrary to popular MYTH, you DON'T need to be rich to invest. Did you know that one share will get you to the party? That is correct, you will be invited to the annua.l shareholder's meeting. So, if you want to see The Zuck live at next year's meeting, buy one share of Facebook (FB).
On the OTHER HAND, if you want to infuse your retirement and/or lifestyle, typically 1,000 shares might do it. BUT, there is NEVER a guarantee that will even happen either.
HOW WILL TWITTER LAUNCH?
With this stated, you should educate yourself on how IPOs work. The firms handling the roll out of Twitter include Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America, Merrill Lynch and Deutsche Bank. IPOs are first offered to clients of these firms, who then sell shares. Individual. high networth clients of these firms may also have access to the IPO. The shares than trickle down to online brokerage houses. You might also have access to them through your mutual funds company. BUT, ALL of this will not be clear until the stock actually starts trading on the exchange.
SHOULD YOU INVEST IN TWITTER?
"Securities," unlike your savings and checking accounts, DO NOT fall under the FDIC protective status. "Securities" are NOT guaranteed. That is why stock trading carries enormous RISK, and in the process, you may lose EVERYTHING. Please refer to my previous statement on the third paragraph, that investing is NOT for the faint hearted.
In order to fully answer this for yourself, DO YOUR RESEARCH! The cons play out here. One in particular is that the microblogging company has not turned a profit. I would prefer to see the balance sheet before I invest in any company. I also would caution against hype. Facebook was a great example of this. Anything "red hot" might not always be a good idea, initially.
How to increase your investment Quotient:
1. Invest in what you know
2. NEVER use money you don't have
3. Don't get wrapped up with daily stock minutia
4. BANK on the business model and executive leadership.
5. Speculative investing is a dangerous practice.
YOUR BOTTOM LINE:
Please weigh the RISK, the HYPE and YOUR CASH!
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