Twitter Stock Slips Back Below IPO Price on Waning Optimism

  • Performance is warning to upcoming offerings, including Square
  • Twitter share price slipped more than 10 percent this week

Any market optimism Twitter Inc. earned by picking a new leader has faded.

The company’s shares are back down below their initial public offering price, touching lows that haven’t been seen since Oct. 2, the week before Jack Dorsey was appointed as chief executive officer. Twitter shares, which have declined 11 percent this week, fell 3.6 percent to $25.18 at the close in New York.

Dorsey’s reign started strong, with several big announcements: picking a new chairman, cutting 8 percent of the workforce and introducing Moments, a product meant to help Twitter appeal to more casual users. But the shares have been slipping since the company forecast fourth-quarter sales that missed estimates.

As companies in Silicon Valley stay private ever longer, Twitter’s experience in the public markets acts as a warning. The company debuted to much fanfare in November 2013, reaching a high of $73.31 on Dec. 26 of that year, before scrutiny of its performance let to share declines, executive shuffles and eventually the replacement of its CEO.

Some of today’s IPOs are faring worse. Fitbit Inc., the maker of wearable devices to track physical activity, priced a secondary offering below the previous day’s close. LoanDepot, a fast-growing mortgage lender, aborted its plan to go public.

Dorsey is doing it all over again very soon with Square Inc., the other company where he is CEO. The mobile-payments provider is expected to price its IPO next week, on Nov. 18.

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