Twitter hits Wall Street with a bang

Shanghai Daily via agencies, November 8, 2013

A sign displays the Twitter logo on the front of the New York Stock Exchange ahead of the company's IPO in New York, November 7, 2013. [China Daily via agencies]

Twitter Inc shares soared as much as 92 percent in their first day of trading Thursday on the New York Stock Exchange as investors snapped up shares in the microblogging site, pushing its market value to a heady US$25 billion.

The stock opened at US$45.10 a share, up from the initial public offering price of US$26 set on Wednesday, then added to those gains, hitting a high of US$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.

If the shares start trading at US$45.50, that would amount to a 75 percent jump from the US$26 IPO price, making it the biggest in a series of huge opening day "pops" for IPOs.

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 bourse 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 yesterday.

The microblogging network priced its 70 million shares at above the targeted range of US$23 to US$25, which had been raised once before. The IPO values Twitter at US$14.1 billion, with the potential to hit US$14.4 billion if underwriters exercise an over-allotment option.

If the full over-allotment is exercised, as expected, Twitter could raise US$2.1 billion, making it the second-largest Internet offering in the United States behind Facebook Inc's US$16 billion IPO last year and ahead of Google Inc's 2004 IPO, Thomson Reuters data showed.

Twitter boasts 230 million global users, including heads of state and celebrities, but it lost US$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.