The announcement of an offering of new shares worth $400 million sent investors rushing for the exits in the Twilio Inc (NYSE:TWLO) stock on Monday.
The stock slumped 14.13% to $52.02, after trading 8.65 million shares.
The bloodbath surrounding Twilio’s follow-on public offering set up the stock for its worst one-day show since its IPO, though investors still have pretty good results under their belt.
The company priced its IPO at $15 but the shares closed at $28.79 on the first day to trading – a leap of 92% over the IPO price.
The company develops cloud communications platforms that connect apps to customers’ mobile phone numbers.
Twilio Inc (NYSE:TWLO) shareholders cashing in their chips?
According to the filing, approximately $50 million out of the new offering will be sold by the company, with the rest being sold by shareholders.
At $52.02 Monday close, the selling shareholders still have gains of 247% on their IPO investment, and therefore it is understandable that they are booking profits.
But existing shareholders may be worried about the fact that well-informed, institutional investors are looking to sell out.
Do they know something we don’t?
Twilio Inc (NYSE:TWLO) was already in sell mode
Though the media is making it seem as if the public offering announcement has triggered a slide in Twilio’s share price, actually, the stock reversed its trend after topping out on September 28 at $70.96.
The public offer announcement, of course, sent Twilio crashing past the 50-day and 20-day moving averages on Monday.
Twilio Inc (NYSE:TWLO) declares preliminary results for the September quarter
In a filing today, Twilio posted total revenue of $70.25 million to $71.25 million, compared to total revenue of $44.3 million in the three months ended September 30, 2015.
Net loss per share attributable to common stockholders is $(0.04) to $(0.05), compared to net loss per share attributable to common stockholders of $(0.07) in the three months ended September 30, 2015.
Pre-market today, Twilio is up 2.88% at $53.52.