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Screenshot of a breaking news alert e-mail from Q2 2017
AvaTrade offering free Twitter shares, IG pushes Twitter trading
The buzz surrounding Twitter’s IPO is helping some forex brokers break new ground in their marketing campaigns. Dublin based AvaTrade is running a 25 Free Twitter Shares campaign, offering new traders who register for an account a what essentially equates to a free 50 USD/EUR sign up bonus.
While the account holder is not entitled to literally get those shares, he/she is free to use the funds credited to his account to trade through any of the Forex/CFD offerings of the company, including CFD’s based on Twitter’s share price, at up to 10x leverage. The offer is limited to 10,000 customers and, in total, AvaTrade will distribute up to 250,000 free Twitter shares.
The rationale behind such a campaign? AvaTrade Chief Commercial Officer Keith Goldson explains it best: “IPOs for companies with strong brand recognition such as Twitter present an excellent opportunity to reach people who may never have considered whether trading is for them. These events bring the excitement of the financial markets to the center of public conversation.”
“With this, our first no-deposit offer, we’re giving those people an opportunity to find out how enjoyable and potentially profitable online Forex and CFD trading can be without taking an immediate risk with their money.”
Elsewhere, the UK’s leading financial spread betting company IG, which already offers grey market trading on the hottest IPO this autumn, will be offering trading in it until right before the bell on the NYSE rings on the 7th of November, marking the first official trading day for the microblogging web-giant.
While most retail forex brokers have decided not to offer Twitter pre-IPO trading, once Twitter prices, we expect more brokers to start ‘Trade Twitter’ advertising campaigns, which should speak to the large swath of ‘average’ retail traders who are familiar with the service, and who most probably use Twitter in their day-to-day lives. We saw a very similar phenomenon used last year in the retail FX industry around the Facebook IPO.
Yesterday financial spread betters were valuing Twitter almost double its $12.8 bln initial target, and the company filed for a price increase it’s seeking in the IPO to increase the range to $23 – $25, up from previous $17 – $20. As Bloomberg reported yesterday, even at the top range of these prices the IPO is already several times oversubscribed.
It would be interesting to see whether the price pattern we observed last year with Facebook’s IPO will be repeated. Three months after the record braking IPO the social media company’s shares were trading less than half of their value on the first trading day. While the “road show” to Twitter investors has been stating that the company is already profitable, these metrics are derived from “adjusted EBITDA” (earnings before interest, taxes, depreciation and amortization) and exclude the stock the company gives to employees.
One thing is for sure – traders who choose to participate in this, are going to get a lot of excitement from volatility and it would be a great advantage to any broker to offer this opportunity to its clients.
To see the latest version of Twitter’s IPO prospectus click here.
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