Weil on Finance: Beware Twitter’s IPO
Happy Hump Day, View fans. Here are your morning links.
John Kimelman of Barron’s has noticed a trend among financial-news outlets when it comes to Twitter’s initial public offering. By and large they’re telling investors to be careful, which surely is a healthy thing. This will be an expensive stock for a company with no profits, especially now that Twitter has increased its offering-price range. The IPO is several times oversubscribed. No sense in needlessly feeding the frenzy.
NQ Mobile’s IPO underwriter abandons ship
NQ Mobile Inc., the latest Chinese company to be targeted by the Muddy Waters research firm, fell 20 percent yesterday, this time after one of its friends abandoned the company, at least temporarily. Piper Jaffray Cos., which was the lead manager for NQ Mobile’s IPO in 2011, suspended its rating on NQ’s stock, which had been the equivalent of a “buy.” Piper Jaffray analyst Mark Murphy wrote that the firm was pulling its rating, price target and earnings estimates “until we have more deeply investigated various allegations against the company made by third parties.” So give Piper Jaffray credit for not sticking its head in the sand. Then again, how thorough could its due diligence have been if it’s unsure what to make of Muddy Waters’s claim that the company is a “massive fraud.” Shouldn’t the underwriter already know if NQ and its numbers are real?
Tesla’s third-quarter numbers
Shares of Tesla Motors fell 12 percent yesterday in after-hours trading yesterday after the electric-car maker reported vehicle sales that fell short of some analysts’ predictions. The company said it delivered about 5,500 Model S cars during the third quarter. A couple of analysts had thought it would deliver more than 5,800. As richly valued as Tesla is, it wouldn’t take much to send its stock tumbling. This will be a stock to watch.
Never would have seen this one coming a couple of years ago
It turns out that customers of MF Global will recover every dollar that they lost. Recall that, back in 2011, the big worry was that about $1.6 billion had vanished from their accounts. So good news. As for Jon Corzine, MF’s former chief executive officer, he still has lots of trouble on his hands.
Tech is in, finance is out
The Wall Street Journal reports that elite business-school graduates increasingly are flocking to tech companies and shying away from finance. It’s like the late 1990s all over again.
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)