Twitter's IPO Shutdown, Result of Government Shutdown Or 17-Year Cycle?
While the Twitterati waited with heightened anticipation for its beloved social network to file its public offering (IPO) papers with the Securities and Exchange Commission (SEC) this past week, it appears the microblogging site just became additional collateral damage as a direct result of the Federal Government's shutdown.
According to Yahoo Finance, "the likelihood of (the iPO) happening died. . . (because) Twitter's management and bankers are too smart to file when the government is in chaos." Congress' actions now undermine what this IPO could have meant for Wall Street, particularly since Twitter's earning forecasts are hovering above $650 million this year.
Prior to these events, Twitter was leaning toward selecting the New York Stock Exchange over NASDAQ (Facebook's exchange of choice) for an IPO valued north of $15 billion. Max Wolff, chief economist at ZT Wealth, talks with Emily Chang about the possible impact of a government shutdown on Twitter's planned IPO and how any wait may hurt the company. He speaks on Bloomberg Television's "Bloomberg West," here.
Should the government's shutdown be sufficiently brief, Twitter faces less of an IPO hiccup. If that be the case, the Twitterati can soon look forward to learning the company’s IPO price — which is thought to be in the $28 to $30 per share area — as well as a definitive list of the banks facilitating the offering. Goldman Sachs, JP Morgan Chase and Morgan Stanley are said to be the lead banks in the process.
So are Twitter investors the only demographic losing out with the shutdown? No, museum and zoo-goers will be locked out of visiting some of DC's most popular area attractions. This includes the ultra-cute Giant Panda Cam at the National Zoo, which went offline the morning of October 1. Folks will now not be able to watch the exploits of the zoo's latest member -- the new Panda cub named "Butterstick" -- on its very popular webcam, sponsored by the Ford Motor Company Fund.
So how long can we be delayed in investing in our favorite social network and visiting the nation's top zoo? If history tells us anything, it may last on upwards of a month. Two government shutdowns in quick succession in 1995 and 1996 lasted for a total of 26 days.
Similar to the shut-down during the Clinton administration, the GOP looked to reduce spending by limiting the growth of an entitlement program, namely Medicare. Fast-forward to 2013 and the same party is tackling the latest government program-du-jour, i.e. Obamacare -- as a means to cut the federal budget.
Might synchronicity be at work here? As we are aware, while the Twitter bird wasn't around to alert us of an impending shut-down back then, there was another reverberating noise that might have been our tip-off. Louder than a tweet trending, the incessant buzzing sound emerging from the ground might have been the signal then and now - potentially making government shut-downs in tune with nature - or on a 17-year life cycle with the infamous cicada!
Ironically, the male cicada has a loud noisemaker in his chest and since his body and brain cavity are mostly hollow, the sound he emanates can be amplified to high decimal levels. Sound like any member of Congress you know? Just saying!