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Twilio tried to calm investors with a strong earnings forecast, but the stock is sliding anyway
(Twilio CEO Jeff Lawson on the day of the IPOTwilio/Twitter)
Twilio's stock is down more than 4% on Thursday, continuing a serious slide that started on Monday after the cloud communications company announced a secondary share offering. Overall, shares have dropped oaver 10% this week.
Twilio tried to calm investors by issuing a new forecast for its next quarterly earnings that would see the company beat Wall Street analyst expectations. But it seems to have had the exact opposite effect, as it only produced a short bump, and the slide continued on Wednesday.
Twilio, which provides phone and text message services to app developers, went public in June in a blockbuster debut that saw its shares surge 90% on its first day of trading. The IPO was a standout in a slow tech IPO market at the time.
But Twilio's honeymoon on Wall Street appears to be over. The company's spectacular rally, which carried its stock from a $15 IPO price all the way to a 52-week high of $70.96 earlier this year, came to a sudden halt after its revelation on Friday that it was planning a follow-on stock offering.
Investors generally don't like follow-on stock offerings, since it dilutes their equity in the company.
Twilio did not say how many shares it intended to sell. But it noted that it would sell $50 million 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.
Shares of Twilio are $48.42 at the time of writing, giving the company a $4 billion market cap. Twilio will announce its next quarterly results after market close on November 3rd.
Here's a chart of Twilio's stock this week:
(screenshot)
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