Twilio’s stock sank 14% on Monday, after the tech company announced plans to sell more equity in a follow-on stock offering.
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 an incredibly slow market his year (although enterprise tech company Coupa saw its shares more than double in its Wall Street debut last week, renewing hopes that the IPO market is coming back to life.)
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 plunged 14% to $52.02 at close of Monday’s close of market.
Here’s a chart of Twilio’s stock since its June IPO:
- Yahoo Finance