Another factor that could play into the price in the near term is the lockup period for their second offering ends on 7/30.
Add to all that the uncertainty of how the acquisition will pan out (but on the other hand the big potential there), the ballooning share count (which may prove to have been a one time thing)…there’s just a lot to digest.
If I’m right, the market is doing just that: digesting – taking a “wait and see” approach to the coming quarter. Could be volatile – lots of upside, but also downside possible. If growth accelerates…maybe Twilio’s 2019 performance catches up to some of our others. If not, if OpEx remains elevated and we don’t see the fruits on the revenue side…Twilio may continue holding or worse.
My primary concerns right now is that between the SendGrid acquisition and the stock offering, they have diluted the stock 50% in the last year. Also, I don’t expect them to organically grow anywhere near the 81% they put up last quarter. Both of those points are cause for some (in)digestion for me. It may prove brilliant to issue so many shares while the price is high, but it clearly adds uncertainty to the near-term as well as implying that management doesn’t find the price undervalued.
I trimmed my position back in May https://discussion.fool.com/twlo-math-not-adding-up-34196616.asp… it is seventh behind AYX, FB, SHOP, ZS, MDB and TTD. I am holding with hope and agree there is a possibility of a nice beat in the upcoming Q, but barring new hope, I’ll be looking for a better idea for my money before year end.