Social Media Routed Just in Time for Twitter's (TWTR) IPO

Twitter's (TWTR) IPO is just around the corner, but investors appear to be getting cold feet, again. On Tuesday, shares of high flying internet names LinkedIn Corporation (NYSE: LNKD) and Facebook (Nasdaq: FB) and others fell sharply. The decline appears to be related in part to concerns about the government shutdown, say traders, although high valuations are no doubt playing a part in the decline.

From Twitter's perspective, if today's rout becomes more than a one-day event, the timing couldn't be worse. Twitter considered an IPO in the past, but halted plans after Facebook stock plummeted in the wake of its IPO. With Facebook stock near a record high, the tide has obviously turned, giving Twitter holders enough confidence to jump in cold water.

The size of the Twitter offering is small at $1 billion vs estimated $20 billion total value of the company, suggesting holders still have some jitters about being public. Today's decline probably does little to ease concerns.

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