Why Twilio Shares Are Higher

Cloud communications platform Twilio Inc TWLO traded higher Friday despite a rough day for the overall markets.

Twilio on Wednesday announced an offering of $750 million of its class A common stock.

"It’s unusual to see a stock trade up this much after a secondary, especially considering they priced at $124," D.A. Davidson analyst Rishi Jaluria told Benzinga in a Friday email.

Jaluria identified two things that may be causing the stock to trade higher.

“The first is the use of proceeds. If it's used in part to pay off the convertible note on TWLO’s balance sheet, then the offering may not end up being as dilutive as initially thought (especially given the converts are likely deep in the money given the price action of the stock)."

Jaluria also said Okta Inc OKTA's strong quarter is pushing Twilio higher. Okta shares rose 7 percent after the company reported better-than-expected first-quarter earnings.

Twilio's stock traded around $131.72 per share, up 3.7 percent at time of publication Friday afternoon.

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