SAN FRANCISCO — The six-month anniversary of Twitter's IPO is a far cry from the stock's cheery debut in New York.
On Tuesday, shares nosedived 18%, to $31.85 a share.
With the IPO's initial sale lock-ups now expired, and more insiders and employees free to sell their shares, it's telling that the company and its lead investment bankers at Goldman Sachs haven't yet pursued a secondary offering of stock.
By not doing so, the company departed from the practice of other Internet firms that went public in the last three years, including LinkedIn, Zynga and Facebook.
Each of those companies floated a few million or so more shares into the public markets in the wake of their respective IPOs — raising millions of dollars more for the companies' balance sheets and generating more fees for their bankers.
As reggae legend Bob Marley once sang, "Strike the hammer while the iron is hot."
Yet even the best stock brokers at Goldman, Morgan Stanley or JPMorgan would have a tough time squeezing professional money managers into buying more Twitter shares while the stock's public performance is lagging the returns of the Nasdaq Composite Index.
Twitter shares are down almost 30% in six months of public trading, while the Nasdaq is up a respectable 5% during that time.
While the pros got Twitter IPO shares for $26 each on Nov. 6, the stock opened trading in the public markets the next morning at $45.10 a share.
By the end of 2013, it was trading above $70 a share, giving a profitless company a bubble-like valuation of more than $60 billion.
On Tuesday, though, the shares were trading at record lows, valuing Twitter at about $18 billion.
That means any public-market investor who's bought and held Twitter is now either under water, at best, or getting slaughtered, at worst.
Even without a secondary offering, millions more Twitter shares will be coming onto the market now that lock-up expirations have begun.
That additional dilution may mean even more pain for Twitter shareholders in the weeks or months ahead.
John Shinal has covered tech and financial markets for more than 15 years at Bloomberg BusinessWeek, the San Francisco Chronicle, Dow Jones MarketWatch, Wall Street Journal Digital Network and others.