Twitter has scored a huge hit on its Wall Street debut, surging almost 73% in the most anticipated listing since Facebook's last year.
Provisional closing figures after the social media group's first trading session showed a gain of 72.84% at $US44.94, a day after the stock offering was priced at $US26 a share.
Earlier, thesocial media company's stock traded without incident, opening at $US45.10 ($A47.66) on the New York Stock Exchange.
With that first trade, at 10:49 a.m. (0249 AEDT Friday morning), the San Francisco-based short-message service sported a market capitalization of $US25.04 billion. That's a heftier valuation than half of the companies in the S&P 500 and larger than well-known brands such as Kellogg Co. and Whole Foods Market Inc.
Within minutes of the opening "print," the stock, which trades under the symbol 'TWTR,' climbed. Shares cracked the $US50 mark, up more than 90% from Wednesday night, before stabilizing around $US45 to $US46. The low point in early trading was $US44, at 11:52 a.m.
The relative serenity stood in marked contrast to the debut of Twitter's social-media cousin, Facebook Inc. A technology glitch in its share sale last year on the Nasdaq Stock Market delayed opening trading, generating confusion, and eventually lawsuits.
Twitter went with a different exchange, the New York Stock Exchange, and a different lead bank, Goldman Sachs, although Morgan Stanley also played a role. By all accounts, Twitter avoided Facebook's early fate as a public company.
For more than an hour before Twitter opened on the NYSE, traders on the NYSE floor sought to find a price for the open, with bidding pushing the stock higher. At one point, the NYSE said investors indicated they would buy shares as high as $US47 apiece before the range being called out on the floor began narrowing.
In Twitter's first 30 minutes of trading, more than 47 million of its shares changed hands. About 80 million Facebook shares changed hands in the first 30 seconds of trading on its opening day last year.
The opening pop shares enjoyed — 73% — is the sixth-biggest on record for US listed IPOs that raised more than $US500 million, according to Dealogic. It edged out the 72% gain in business software maker Workday Inc.'s Oct. 2012 opening trade.
The chunky leap in the share price was good news for investors who purchased the shares Wednesday night. But that didn't include many retail, or individual, investors. They received roughly eight to 12 million of the total 80.5 million sold by the underwriting banks last night, or around 10% to 15% of the offering. That is a much smaller share than went to small investors in Facebook's IPO, which placed 26%--or over 100 million shares — with individuals.
The narrow trading range once the stock went public Thursday meant that investors who bought shares in the open market had limited opportunity to profit by midday.
Twitter chairman Jack Dorsey and chief executive Dick Costolo, both in sports jackets and Mr Costolo wearing a tie, were on the floor of the NYSE with Mr Noto, the Goldman point person on the deal. The executives didn't ring the opening bell. That task went to actor Patrick Stewart and other members of the cast of the Broadway show No Man's Land.
With the rise in price, Mr Dorsey's stake in Twitter grew to around $US1.1 billion, with Mr Costolo's reaching $US346 million.
Meanwhile, in San Francisco, Twitter employees tweeted pictures of their own gathering inside Twitter headquarters, where employees watched their chief executive appear on CNBC before the open.
Wall Streeters and other market observers immediately weighed in on the fresh valuation.
"It is an eye-popping valuation," says Anant Sundaram, a finance professor at Dartmouth's Tuck School of Business. "I am at a loss to explain even a tenuous connection to fundamentals."
Pivotal Research Group senior analyst Brian Wieser downgraded his rating on Twitter to sell from buy immediately after the stock started trading. He put a $US30 price target on the company, about 33% less than Twitter's opening price.
"With a price that pushes into the high 30s and beyond, Twitter is simply too expensive," Mr Wieser says.