The Twitter IPO and a reporter’s perspective
With the Twitter initial public offering expected to price and begin trading later this week, business journalists have been voracious in their coverage of the story.
Carl Quintanilla is one of the principal anchors of CNBC’s “Squawk on the Street,” which broadcasts live from the New York Stock Exchange.
Since joining the network in 1999, Quintanilla has covered a wide range of stories for both CNBC and NBC News, where he was a New York- and Chicago-based correspondent. He has covered the Beijing and London Olympics, the reconstruction of post-war Iraq and the 2004 U.S. presidential campaign. In 2005, he spent weeks in New Orleans as part of NBC’s team coverage of Hurricane Katrina, for which he shared a national Emmy, an RTNDA Edward R. Murrow Award and broadcast’s highest honor, the Peabody Award.
Prior to joining NBC, Quintanilla spent six years as a reporter for The Wall Street Journal. Quintanilla earned a bachelor’s degree in political science from the University of Colorado.
Quintanilla spoke by email with Talking Biz News about how he has been covering the Twitter IPO. What follows is an edited transcript.
How do you learn to cover an initial public offering?
Well, I don’t cover banking. CNBC has an army of talented reporters far better equipped to cover the IPO — Kayla Tausche, David Faber and Bob Pisani, just to name a few. But as an anchor (and former WSJ reporter), I know enough to be dangerous. It requires an eye for detail — knowing how to find tiny disclosures in amended S-1s, for instance. And there’s the reaching out to sources — market makers, bankers, attorneys, exchange officials — who have a hand in a complex process.
Since the company isn’t talking, how hard is it to report such a story?
The company IS talking — just in the form of SEC filings. The prospectus has always been a bit like a kimono being lifted. That’s certainly the case with Twitter, which was particularly coy leading up to this stage.
What did you learn from previous IPO stories that you’re now applying to the Twitter IPO story?
Obviously, everyone wants to draw lessons from Facebook. There are so many similarities: two companies, based in Silicon Valley, selling social media, becoming household names. I think much of the focus will be on the NYSE, though, and people will be reminded of how human interaction still serves an important function in capital markets. The image of the designated market maker on the NYSE floor this week will be a contrast to the computer issues we all remember on the morning Facebook began trading.
Would you agree that there doesn’t seem to be as much interest in this IPO as Facebook’s?
I think it’s commensurate with Twitter’s user penetration. Twitter has about one-fifth of Facebook’s user base. I’d argue the level of interest is at least one-fifth of Facebook’s IPO.
What is it like reading through the SEC documents that Twitter files to look for stories?
The stories jump off the page. Not just the metrics like revenue per user, but also the way in which those metrics are presented. They tell you a lot about a company. (Did you read the Groupon prospectus? They turned accounting into a black art, and it came back to bite them.)
What other sourcing do you use for this story?
I’ll never tell.
Why do you think IPOs of companies like Twitter and Facebook are such big business stories?
It’s a “coming out” — like a college player being drafted into the NFL or NBA. How’s the rookie received? What’s his first year like? It’s the beginning of a narrative: about whether this company has the “stuff” to play with the big boys — to weather the scrutiny of quarterly earnings, activist investors, Reg FD, and so on. There’s also something inherently interesting about watching capital being generated before your very eyes. That’s why IPOs are perfectly suited to live TV, which we obviously like a lot.
There was an IPO last week for The Container Store that saw a huge first-day pop but it didn’t seem to get as much coverage. Why do you think that’s the case?
Really? We thought it was a big story. There was a huge crowd on the NYSE floor. We interviewed the CEO after the stock opened up almost 100 percent. Maybe it’s because they’re still kind of an “unknown” to many people: only 63 stores in 22 states. That will change, though. Its plan is to expand to 300.
Do you see these stories as an indication that maybe the IPO market is turning around? If not, then what does it signify?
The IPO market has been red hot this year. End of story. The average IPO is up 16 percent on their first day of trading. That’s the biggest pop in at least a decade. If anything, I think people expect the IPO market to cool off, as we get closer to some form of tightening by the Federal Reserve (whenever that comes). The folks who came public this year were very smart, or very well advised.
What has CNBC been trying to focus on with its Twitter IPO coverage?
We always try to bring it home for the retail investor. Is this a stock you should buy if you have the chance? What kind of portfolio does it fit into? What does it say about the state of the overall market? As for myself, I reported the CNBC documentary, “#TwitterRevolution” earlier this year — and I just try to add as much context as I can about the company, itself. Twitter is the beneficiary of a lot of serendipity. One of my favorite sayings about the company is: “It’s the story of a handful of guys who drove their clown car into a gold mine.”
How hard is it to distinguish your coverage on a story like this that everyone seems to be covering?
Not hard at all, actually. No one in television knows the company like CNBC does. No one has covered it — from inside and out — like CNBC has. This is one of those weeks where the power of the network just speaks for itself.