If you watched Facebook's stock debut on May 18, 2012 and then slipped into a comma, waking up nearly 17 months later, you'd see the company stock up 30% over that time period. Not a bad return for anyone who kept their Facebook stock acquired at the IPO price.

Most media reports would say that the Facebook IPO was a disaster.  They had trading glitches and the stock didn't close significantly higher than the IPO price on day one.  Subsequently, the price fell to less than half the IPO price in the coming months.  Absolutely terrible!

Not so fast.  The company successfully raised $10 billion with the IPO.  They maximized the price investors had to pay to participate in the IPO. To a company going public, the goal is to raise as much money as possible while giving up as little as possible. When IPOs pop on the first day, that means companies left way too much money on the table. Facebook did not leave much money on the table since the IPO was fully valued.  17 months later they still have that $10 billion in cash and equivalents and their long term investors are up 30%.

The reality is, as PandoDaily fittingly puts it, IPO success is measured in years, not minutes.

On the heels of Twitter's IPO, it will be interesting to see if their IPO is as successful as Facebook's.  Will their stock jump on the first day of trading, leaving millions of dollars on the table or will the equity get fully priced with a small increase in stock price for the day?  

Based upon recent IPOs, the evidence is leaning toward Twitter going public and immediately increasing significantly in price.  This means they'll be leaving a significant chunk of money on the table.  Remember, as mentioned above, Facebook has access to $10 billion and is profitable.  Twitter has a fraction of that amount ($375 million at the time of filing) and is only expected to raise $1 billion more.  In addition, they plan to continue burning through money as they grow.  

When I refer to Facebook as having one of the best IPOs ever, I mean two things:

1)  It provided long term investors with significant returns over a short period (30% in 17 months) with more upside potential. 

2)  It maximized the cash it raised positioning the company for significant future growth.  That cash has allowed it to figure out monetizing mobile and provides it with plenty of liquidity to weather a rough patch without having to hit the equity markets for more and diluting shareholders.

I have a feeling that as Twitter scales, it may conduct a following on offering, especially if it's price is significantly higher than the IPO price in the next 6 to 12 months since it will burn through a lot of cash (the company has plans to significantly increase headcount) before hitting profitability.

Does that mean Twitter's IPO won't be a windfall for investors?  Absolutely not.  The stock, if it pops on day one and maintains a strong price over the next 17 months, will be very successful for investors, but it will have failed to maximize its cash position while preserving dilution.  It's those two ingredients that make for the best IPOs and Facebook has executed successfully on both of them so far.