Twitter surges 75% on debut
Shares opened at $US45.10 when they began trading on the New York Stock Exchange on Thursday and surged as high as $US50.08, handing the loss-making company a valuation of $US24 billion.
Twitter had given itself a $US14.2 billion price tag on Wednesday night, when the eight-year-old business priced its initial public offering at $US26 a share.
It handed the traditional task of ringing the NYSE's opening bell over to the social network's users, including actor Patrick Stewart and Vivienne Harr, a nine-year-old anti-slavery campaigner who did the honours wearing a tiara and a blue tutu.
However, the San Francisco business did not start trading for more than an hour after the exchange opened, as NYSE took its time calculating the exact opening price for the shares.
The delay briefly raised fears that there had been a technical glitch, echoing the blackout which forced the Nasdaq exchange to delay Facebook's market debut.
Twitter's initial surge also had echoes of Facebook, which placed at $US38 a share when it went public in May last year, and traded as high as $US44.50 before falling back to just above its opening price. In the following months, it fell to $US17.55, in what was seen as one of the most disastrous technology IPOs for a decade. It has only recently recovered its lost ground.
However, the similarities ended there. Twitter's shares appeared to be maintaining their momentum. In afternoon trading in New York, they were holding steady at about $US45.75 - an increase of more than 75 per cent on their IPO price.
Twitter's IPO is the biggest test of investor appetite for technology stocks since Facebook's stuttering start and will have a major impact on the valuations other dotcom companies can achieve.
However, Twitter's strong start has also stoked fears of a new dotcom bubble. Analysts have expressed concern that Twitter does not make a profit. The company, which makes money from advertising, doubled revenues to $US168.6 million in the September quarter, helped by a surge in mobile usage.
However, it saw losses widen year on year from $US21.6 million to $US64.6 million.
The business has not disclosed when it expects to move into the black. "The Twitter IPO shows the sublime and the ridiculous nature of our capital markets," said Peter Garnry, head of equity strategy at Saxo Bank. "It shows how the capitalist system allocates capital to growth companies ... but these tech IPOs have become like a video game."
Frequently Asked Questions about this Article…
Twitter's stock had a strong debut, opening at $US45.10 and surging as high as $US50.08, giving the company a valuation of $US24 billion. This was a significant increase from its IPO price of $US26 per share.
Twitter's stock had a strong debut, opening at $US45.10 and surging as high as $US50.08, giving the company a valuation of $US24 billion. This was a significant increase from its IPO price of $US26 per share.
Twitter's IPO was priced at $US26 per share, which valued the company at $US14.2 billion before trading began.
There was a delay in Twitter's trading on the NYSE because the exchange took extra time to calculate the exact opening price for the shares. This delay briefly raised fears of a technical glitch similar to what happened during Facebook's market debut.
There was a delay in Twitter's trading on the NYSE as the exchange took time to calculate the exact opening price for the shares, which briefly raised fears of a technical glitch similar to Facebook's market debut.
Analysts are concerned that Twitter does not make a profit, despite doubling its revenues to $US168.6 million in the September quarter. The company also saw its losses widen from $US21.6 million to $US64.6 million year on year.
Twitter generates revenue primarily through advertising. The company saw its revenues double to $US168.6 million in the September quarter, driven by a surge in mobile usage.
Twitter generates revenue primarily through advertising. The company has seen a surge in mobile usage, which has helped boost its advertising revenues.
No, Twitter is not currently profitable. Despite doubling its revenues, the company saw its losses widen from $US21.6 million to $US64.6 million year on year.
Twitter's IPO is considered the biggest test of investor appetite for technology stocks since Facebook's IPO. Its strong start could influence the valuations other dotcom companies can achieve, but it also raises concerns about a potential new dotcom bubble.
Analysts are concerned about Twitter's lack of profitability and the potential for a new dotcom bubble, despite the company's strong start in the stock market.
While both Twitter and Facebook had initial surges in their stock prices, Twitter's shares maintained their momentum, unlike Facebook's, which fell back to just above its opening price shortly after its IPO.
Twitter's IPO is seen as a major test of investor appetite for technology stocks and could significantly impact the valuations of other dotcom companies.
After its first day of trading, Twitter's valuation soared to more than $US27 billion, significantly higher than the $US14.2 billion price tag it set the night before its IPO.
Twitter handed the task of ringing the NYSE's opening bell to its users, including actor Patrick Stewart and Vivienne Harr, a nine-year-old anti-slavery campaigner.
A unique aspect of Twitter's IPO debut was that the company handed over the traditional task of ringing the NYSE's opening bell to its users, including actor Patrick Stewart and a nine-year-old anti-slavery campaigner, Vivienne Harr.
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