Twitter made an impressive debut at the New York Stock Exchange Thursday morning as shares of the company opened 73 per cent higher than its initial public offering price.
British actor Patrick Stewart, of Star Trek fame, rang the opening bell at Big Board together with nine-year-old Vivienne Harr, who started a charity to end childhood slavery using the microblogging site.
Shares of Twitter traded between $45 and $47 in their first hours on the New York Stock Exchange on Thursday morning, under the ticker symbol “TWTR.”
The company and its underwriters, led by Goldman Sachs, on Wednesday evening had set a starting price for the stock of $26. At the stock’s $45.10 opening price on Thursday, the seven-year-old company had a total market value of more than $25 billion, making it worth more than companies such as Kellogg, Netflix and Whole Foods and twice the value of iconic aluminum giant Alcoa, says the Huff Post.
Heavy demand for the IPO shares was apparent before the final pricing. A strong first-day showing would mean the company might have underpriced its IPO, potentially missing out on billions of dollars it could have invested in its future growth.
As Reuters reports, market sources said investors had asked for 30 times the 70 million shares on offer in the IPO, representing about 13 percent of Twitter’s outstanding common shares.
Twitter could raise $2.1 billion if an underwriters’ over-allotment is exercised, as expected, 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 joins a hot sector of the stock market, despite Thursday’s declines. After early struggles, Facebook stock has surged in the past few months after revealing significant growth in its mobile numbers. Shares of Facebook have more than doubled since hitting a 52-week low of $19.21 last year. Year-to-date, Facebook has posted an 80.7% gain.
Meanwhile, LinkedIn has skyrocketed in value, with shares vaulting from $101.21 on this day last year to over $220. And the recommendations service Yelp has watched its stock surge 234% year-to-date, according to the USA Today.
Tech expert Carmi Levy told CTV’s Canada AM that Twitter’s impressive market debut was a surprise to many.
“It shows that there is a lot more demand for the share, a lot more people are interested in it than they originally thought,” Levy said.
Twitter executives including Chief Executive Dick Costolo and the three co-founders – Evan Williams, Biz Stone and Jack Dorsey – appeared on a packed exchange floor to witness the debut. At current valuations, the stakes owned by Williams and Dorsey would be worth $2.7 billion and $1.1 billion, respectively. Costolo, who invested $25,000 in the fledgling company in 2007, holds a 1.4 percent stake worth $360 million.
Twitter, which was first created in 2006, has grown to become one of the largest and most popular social-networking sites on the Internet, attracting world leaders, celebrities and ordinary citizens.