Two of 2016’s top IPO performers saw their stocks fall on Monday as investors took a financing announcement as reason enough to take profit off the table.
The IPO Darling That Just Lost 15%
Twilio (NYSE: TWLO), the hot-flying IPO that tripled in value since it began trading in June, was trading lower by around 15 percent on Monday. Including Monday’s notable decline, the company’s stock is still higher by an impressive 80 percent since June.
The company offers cloud communications platforms that allows develops to build, scale and operate real-time communications within software applications.
The reason for the decline is attributed to an announcement that the company needs to raise $400 million in a secondary offering. The company said in its regulatory filing that it will use the proceeds to fund growth initiatives, including growing its engineering sales, marketing and customer support teams.
The company also plans on enhancing its technology platform, grow its developer community accelerate adoption, increase its international presence, among others.
Acacia Fails To Hold The $100 Level
Acacia Communications (NASDAQ: ACIA) saw its stock fall around 8 percent on Monday yet it still remains a top performer this year as it is higher by nearly 200 percent since its initial public offering in May.
The company saw its stock soar above the $110 per share mark on October 5 after the company lifted its third quarter outlook for the second time in just 10 days. However, the company priced a secondary share offering on October 7 at $100 a share.
Acacia sells products for communications networks for use in metro and inter-data center markets.
Acacia was a bit less vague in its regulatory disclosure as to what it intends to do with the proceeds. The company merely said it will be sued for working capital and general corporate purposes.
However, the company hinted that it may use the cash to pursue strategic acquisitions or investment in complementary products, technologies or businesses. While there are no current plans to do so the company now has the cash to take advantage of any future opportunities.
Even though the company priced its offering at $100 per share investors appear to be unhappy since the stock is now trading at a notable discount to the offering price.