Kyle Stanford February 11, 2016
Earlier this week, Twitter (NYSE: TWTR) saw its market cap fall below $10 billion, flirting with its 2011 Series G valuation of $9.3 billion and dropping below the $10 billion valuation it received with a $300 million investment later that year. The fall has not been graceful for the social network that was once valued at $40 billion on the public market. Executive changes, slow user growth and a murky vision of its future path have all contributed, along with the current market conditions. After Twitter's 4Q earnings reported that user growth stalled, even as revenue rose 48% YoY, the stock took a quick dive to a record low.
No companies are faring well in the current market, but Twitter’s fall is notable for several reasons. For one, the company’s current market cap is about 25% of its all-time high. But maybe more importantly is that the company had raised multiple private financings that valued it higher than its market cap this week. And this is a company that didn't have to take a valuation hit when it successfully IPO'd in 2013.
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Twitter’s market cap might not look quite so bad when compared to past private valuations, given the market is approaching bear levels and tech stocks in particular are taking quite a beating. But it does call into question the recent mega valuations being garnered in the private markets, with successful exit possibilities—at least through an IPO—looking more unappealing and unattainable.
Here are some other companies that have seen their market cap fall the furthest from their private valuations.