Wall Street
Twitter debuts on stock exchange with success
NEW YORK — Shares of Twitter went on sale to the public for the first time Thursday, instantly leaping more than 70 percent above their offering price in a dazzling debut that exceeded even Wall Street’s lofty hopes.
By the closing bell, the social network that reinvented global communication in 140-character bursts was valued at $31 billion — nearly as much as Yahoo Inc., an Internet icon from another era, and just below Kraft Foods, the grocery conglomerate founded more than a century ago.
The stock’s sizzling performance seemed to affirm the bright prospects for Internet companies, especially those focused on mobile users. And it could invite more entrepreneurs to consider IPOs, which lost their luster after Facebook’s first appearance on the Nasdaq was married by glitches.
In Silicon Valley, the IPO produced another crop of millionaires and billionaires, some of whom are sure to fund a new generation of startups.
Twitter, which has never turned a profit in the seven years since it was founded, worked hard to temper expectations ahead of the IPO, but all that was swiftly forgotten when the market opened.
Still, most analysts don’t expect the company to be profitable until 2015. Investors will be watching closely to see whether Twitter was worth the premium price.
Thursday’s stock surge was “really not as important as you might think,” said Kevin Landis, a portfolio manager with Firsthand Funds, who owns shares in Twitter. “What really matters is where the stock is going to be in six months, 12 months.”
The most anticipated initial public offering of the year was carefully orchestrated to avoid the dysfunc- tion that surrounded Facebook’s debut.
Trading on the New York Stock Exchange under the symbol “TWTR,” shares opened at $45.10, 73 percent above their initial offering price.
In the first few hours, the stock jumped as high as $50.09. Most of those gains held throughout the day, with Twitter closing at 44.90, despite a broader market decline.
The narrow price range indicated that people felt it was “pretty fairly priced,” said JJ Kinahan, chief strategist at TD Ameritrade.
The price spike “clearly shows that demand exceeds the supply of shares,” said Wedbush analyst Michael Pachter.
Earlier in the day, Twitter gave a few users rather than executives the opportunity to ring the NYSE’s opening bell. The users included actor Patrick Stewart, who played Captain Jean-Luc Picard in “Star Trek: The Next Generation”; Vivienne Harr, a 9-year-old girl who ran a lemonade stand for a year to raise money to end child slavery; and Cheryl Fiandaca of the Boston Police Department.
Twitter raised $1.8 billion Wednesday night when it sold 70 million shares to select investors for $26 each.