Twilio Inc. (NYSE: TWLO) has made a huge run since its initial public offering (IPO) debut this summer and now shareholders are looking to cash in. Twilio is following in the footsteps of another unicorn, Acacia Communications Inc. (NASDAQ: ACIA). Both companies are having secondary offerings to cash in on their massive runs over the summer.
A secondary offering after a stock has jumped massively is one way for companies (or selling shareholders) to literally cash in on their success. In some cases the company is diluting shareholders, but it is funding further growth within the company. In other cases selling shareholders are just looking to cash in on the run.
Twilio filed with the U.S. Securities and Exchange Commission (SEC) for a proposed follow-on offering. No pricing details were given in the filing, but the offering is valued up to $400 million. The company has a total market cap of $5 billion.
The underwriters for the offering are Goldman Sachs, JPMorgan, Allen, Pacific Crest, JMP Securities and Canaccord Genuity.
Bank in June, Twilio entered the market with a bang. The company ended up pricing its IPO at $15, above of the expected price range of $12 to $14. However, it actually entered the market close to $25. There were 10 million shares in the offering, with an overallotment option for an additional 1.5 million.
Just last Friday, Acacia announced the pricing of its follow-on public offering of 4.5 million shares at $100 per share, with an overallotment option for an additional 675,000 shares. At this price the entire offering is valued up to $517.5 million.
The offering consists of 1,210,302 shares from the company and 3,289,698 shares from certain existing stockholders.
Keep in mind Acacia Communications currently has a total market cap near $3.7 billion.
The underwriters for the offering are Goldman Sachs, Merrill Lynch, Deutsche Bank, Morgan Stanley, Needham, Cowen, William Blair and Northland Capital Markets.
Looking back at its IPO in May, the company priced its 4.5 million shares at the high end of its range of $21 to $23 per share. At this price, the entire offering would have been valued up to roughly $119 million. However, the stock actually entered the market at $29, well above the set price. Since that time, the stock has risen to over $125 per share.
Shares of Twilio were trading down over 7% at $56.14 on Monday, with a consensus analyst price target of $39.00 and a 52-week trading range of $23.66 to $70.96.
Acacia shares were down more than 3% to $96.66. The consensus price target is $114.00, and the 52-week range is $27.05 to $128.73.