Twilio Inc (NYSE:TWLO) endured its biggest intraday fall since its public debut in June on Monday after the technology group revealed plans for some shareholders to cash out.
Late on Friday, the group said in a filing with US securities regulators that it would launch a $400mln follow-on offering in which it “will not receive any proceeds”. #
As vague as that was – in the absence of any pricing information or indication which investors were exiting – the signal wasn’t handled all that well for the remaining investors who had planned to stay.
For one thing, it is never smart to follow up on an IPO with a second share offer within just a few months.
While details of the new offer were sketchy, the company noted that it would sell $50mln shares of Class A stock, while existing shareholders would sell an unspecified number of shares as well as part of the offering. Investors clearly were not happy with the news.
Twilio, which makes software that lets cloud applications communicate with each other, has had a stellar three months. Since its IPO the share prices has surged by over 300% by Friday close.
The IPO marked one of the biggest US tech listings of the year, and paved the way for other so-called unicorns that had obtained private valuations of at least $1bn to float their shares.
Fellow unicorn stocks Nutanix (NASDAQ:NTNX) and Coupa Software (NASDAQ:COUP) have tapped public markets in the past two weeks at valuations that topped the ones they had achieved privately, in a good sign for Silicon Valley venture capitalists.
Anyway, back down on Planet Earth, Twilio’s shares fell 11.1% to $53.95 on Monday.
Nutanix shares were not chirpy either, down 1.6% at $37.56, while Coupa was down 0.5% at $29.53.