Twitter IPO stokes hot market for ’Net stocks
By MICHAEL LIEDTKE
AP Technology Writer
Internet stocks are heating up again, just as Twitter is preparing to turn up the temperature with its highly anticipated IPO.
Consider what’s happened in the past month: The once-scorned stocks of Netflix and Facebook have soared to new highs; Yahoo’s long-languishing stock has regained its vigor and surpassed $34 for the first time in nearly six years; enamored investors just poured more than $1.7 billion into secondary stock offerings by LinkedIn and Pandora Media Inc.; and Priceline.com’s stock recently broke $1,000, catapulting past its peak reached in 1999 during the dot-com boom.
“There is great demand right now to invest in companies that could be powering the future, but it’s a window of opportunity that won’t last forever,” says BGC Financial analyst Colin Gillis.
As hot as some Internet stocks are, the fervor is nothing like it was in the late 1990s when investors minted dozens of unprofitable companies with rich market values.
“The difference is that investors today are investing on value rather than on emotion and hype, as was the case in 1998 to 2000,” says Jeff Corbin, CEO of investor relations consultant KCSA Strategic Communications.
Many of today’s investors are judging Internet companies on their individual merits and prospects for growth. “Back then,” says Corbin, “just by including the word ‘Internet’ in a company description or name gave rise to a multi-million if not billion-dollar valuation.”
Twitter couldn’t have chosen a better moment to join the party. The timing proved to be ideal for recent IPOs by Rocket Fuel Inc., a company that uses artificial intelligence software to distribute digital ads, and FireEye Inc., a maker of computer security software. The stocks of both Silicon Valley companies nearly doubled in their Sept. 20 trading debuts.
Twitter hasn’t set a timetable for its IPO since announcing its plans to go public in a Sept. 12 tweet. Most analysts expect the San Francisco company to complete the process in November or December.