This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Investing in Twitter Through ETFs

NEW YORK ( TheStreet) -- Thursday's big news was that Twitter filed a confidential S-1 form with the SEC, which is the first regulatory step in the process for an initial public offering or IPO. The significance of the word confidential is that, under the JOBS act, companies with revenue less than $1 billion do not need to disclose their numbers in this first step of the process.

Although the actual listing probably won't happen until early next year, there is already plenty of speculation about what the value of the company might be when it actually starts trading. On many accounts, the company had a private market value of $10 billion earlier this year, leading some to conclude that the pricing of the IPO in a few months could be around $14 billion. Regardless of its initial value the stock could go higher right away, along the lines of other social media companies like LinkedIn (LNKD - Get Report), whose IPO was priced at $45 and closed its first day of trading at $94.25.

There will be several ETFs that will offer different levels of exposure for investors interested in owning Twitter but not wanting to take single-stock risk.

The Global X Social Media ETF (SOCL - Get Report) added Facebook (FB - Get Report) after 10 days of trading. At the time, CEO Bruno del Ama was quoted as saying that waiting 10 days before adding it to the fund could avoid some of the initial volatility. Regardless of whether there is more volatility in the first few days for Twitter stock, based on current numbers under the hood of SOCL, Twitter would be the fifth-largest holding with perhaps a high single-digit weighting in the fund.

Of course, Facebook is by far the largest company in the space, but the weighting is capped and currently is 12% of the fund, which is the same weighting as Tencent Holding (TCEHY) and Sina (SINA), which are both Chinese companies. Twitter's potential weighting in SOCL would be enough to move the needle right away.

The other ETF likely to add Twitter soon, and in a meaningful weighting, is the First Trust DJ Internet Index Fund (FDN). Based on FDN's current constituency, Twitter could be a top-10 holding, with approximately a 3%-4% weighting. FDN's largest holdings are Google (GOOG), Amazon (AMZN), eBay (EBAY) and Facebook. Stocks are eligible for inclusion once they have three months of trading history.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SOCL $19.32 0.05%
FB $82.64 -0.79%
LNKD $254.65 -0.80%
FPX $53.97 0.58%
FDN $65.09 0.18%


DOW 17,986.95 +274.29 1.55%
S&P 500 2,083.87 +22.85 1.11%
NASDAQ 4,934.1850 +42.9660 0.88%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs