Does Twitter’s Valuation Really Matter?

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Nov. 4 (Bloomberg) –- Canaan Partners General Partner Warren Lee discusses Twitter’s upcoming IPO. He speaks with Stephanie Ruhle on Bloomberg Television's "Money Moves." (Source: Bloomberg)

Does it matter if twitter is rich?

There is a jew huge appetite for these deals, is anyone really looking at the valuation?

Or are they calling goldman begging for a big allocation?

Certainly twitter is one of the biggest ipos we have seen for a long time and i would say that for the ipo's this week and for the time afterwards, it is just demand over supply for what is available.

I expect they will have a very strong ipo, trading up, with a nice monday pop, over the next couple of quarters they will have to continue to perform.

Is it tricky, when twitter goes to allocate the deal with underwriters, is that one of the trickier moments russian market remember facebook, one of the massive demands aren't tech players who wanted big allocations, they lost their minds when it did not go well.

Is it fair for an investor to lose their mind over it?

This is a big boys game.

If you do not know how to invest in the markets, get out of it.

Should jp morgan and goldman sachs be so concerned about who they give it to?

If this deal flips, it will look really bad.

Wax twitter has the benefit of having gone after facebook.

A lot of people learned a lot of lessons from that in terms of how they price the deal and spread the allocation to different institutional investors, i am sure the bankers are trying to make sure that the biggest allocation to institutional investors is that they will only company and continue to hold ownership in twitter over time building up a position.

How concerned are you that in six months or nine months those insiders are going to sell?

That was a big deal for facebook, insiders could sell right outside the gate, that is not the case for twitter.

Is up to every company that is public to perform.

If they can continue to execute and show growing revenues with usage with a path to profitability, that will take care of itself.

It is again up to the company to execute.

Is it greedy that they jacked up the pricing when originally they said they would be between $17 and $20 russian mark is it greedy of them to walk up the pricing or just a response to demand?

I would not characterize it as greedy.

When a company like this has an obligation to raise capital for itself on the best most attractive terms, i think they came out with an initial range of pricing that was relatively conservative and clearly it was able to catalyze additional demand for the shares.

They are simply responding to market demand in raising the price.

Even with a higher price, i still think they will enjoy a nice pop on thursday.

I think there is a balance between leaving money on the table to taking every sent off the table.

What do you think about the timing of the deal?

I think it is perfect.

Facebook has overall -- general the generally -- generally the ipo market has improved.

Stocks in other categories are trading well, they are showing appetites for new issuances.

Particularly the twitter category, social media, facebook and twitter have traded nicely and they are taking to twitter with taking advantage of favorable market conditions to go public, extract some of that premium valuation and strike the balance sheet.

Is it fair to say that facebook was a disaster?

Look at the extraordinary run it has had.

I do not think so, at the end of the day for most startups who eventually go public, you have to see the ipo is the funding event, it is not the finish line, it is the starting line, so to speak.

I think that they accomplished a lot at facebook.

Since then they have executed, the stock has increased dramatically.

Again we look at these companies over the years as they go public, the price of the stock trades the day after and it is hard to gauge and say whether a company is successful or not.

On thursday i have a feeling that we are going to say that

This text has been automatically generated. It may not be 100% accurate.


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