Twitter Inc stock soared 92 percent in their first day of trading on Thursday on the New York Stock Exchange as investors snapped up shares in the microblogging site, pushing its market value to a heady $25 billion.
The shares opened at $45.10 a share, up from the initial public offering price of $26 set on Wednesday, then added to those gains, hitting a high of $50.
Sources said the flotation had drawn strong demand, with investors asking for 30 times the number of shares on offer as they bet on potential growth at the money- losing social media company.
The opening price valued the shares at about 22 times forecast 2014 sales, nearly double that multiple at social media rivals Facebook Inc and LinkedIn Corp.
Twitter executives including Chief Executive Dick Costolo and founder Jack Dorsey thronged to the floor of the New York Stock Exchange to witness the IPO. The Big Board snatched the offering away from Nasdaq after the normally tech-focused Nasdaq stumbled with the larger Facebook flotation last year.
“Facebook was so overhyped people felt like they couldn’t miss out,” said Kenneth Polcari, a senior floor official at O’Neil Securities Inc. “Twitter isn’t like that, though you can feel the excitement.”
British actor Patrick Stewart rang the opening bell at the exchange together with nine-year-old Vivienne Harr, who started a charity to end childhood slavery using the microblogging site.
“I guess I represent the poster boy for Twitter,”
Stewart said, adding that he had only been tweeting for about a year and wasn’t buying Twitter stock today.
Twitter’s building staff opened its offices in San Francisco extra early, at 5:30 a.m. on Thursday. By 7:30 a.m., hundreds of employees had flocked to their 9th floor cafeteria to watch Stewart ring the opening bell on TV.
The microblogging network priced its 70 million shares at above the targeted range of $23 to $25, which had been raised once before. The IPO values Twitter at $14.1 billion, with the potential to reach $14.4 billion if underwriters exercise an overallotment option.
If the full overallotment is exercised, as expected, Twitter could raise $2.1 billion, making it the second largest Internet offering in the United States behind Facebook Inc’s $16 billion IPO last year and ahead of Google Inc’s 2004 IPO, according to Thomson Reuters data.
Twitter boasts 230 million global users, including heads of state and celebrities, but it lost $65 million in its most recent quarter and questions remained about long-term prospects.
It also lacks the ubiquity of Facebook or the “stickiness” factor that keeps people checking the No. 1 social network on a daily basis.
A Reuters-Ipsos poll last month showed that 36 percent of people who signed up for a Twitter account say they do not use it. (Reuters)