Social Media site soars on first day of trading
After starting up just seven years ago, social media site Twitter has fast become one of the most visited websites on the Internet and last week it took the huge step onto the New York Stock Exchange (NYSE).
With shares initially offered to the public for $26 on Wednesday, the official trading began on Thursday 7th November where prices soared way above expectations.
Prices increased as much as 92 per cent in its first day, reaching a peak price of $50 with investors eager to snap up the shares in the micro-blogging website. By midday the shares were already up 73.7 percent to $45.15.
Officially, more than 13 million shares were traded once they became available an hour after the stock exchange opened.
The opening price valued the shares at about 22 times the forecasted 2014 sales, nearly double that multiple at social media rivals Facebook Inc and LinkedIn Corp. All the more amazing, is the fact that Twitter has more than 230 million users, but is yet to make a profit, with many investors looking for future rewards.
Including restricted share units and other securities that could be exercised in the coming months; the company's market value was over $28 billion.
Twitter executives including Chief Executive Dick Costolo and the company's three co-founders - Evan Williams, Biz Stone and Jack Dorsey - went to the floor of the NYSE to witness the IPO.
The Big Board, which marked the occasion with an enormous banner with Twitter's bird logo along its Broad Street facade, 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 9-year-old Vivienne Harr, who started a charity to end childhood slavery using the micro-blogging site.