Twitter shares make dazzling debut
Published 07/11/2013 | 00:46
Shares in Twitter have gone on sale to the public for the first time, instantly leaping more than 70% 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 dollars (£19bn) - nearly as much as Yahoo, an internet icon from another era, and just below Kraft Foods, the grocery conglomerate founded more than a century ago.
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 with the stock's opening surge.
The most anticipated initial public offering of the year was carefully orchestrated to avoid the glitches and eventual letdown that surrounded Facebook's first appearance on the Nasdaq 18 months ago.
Trading on the New York Stock Exchange under the symbol "TWTR," shares opened at 45.10 (£28.11), 73% above their initial offering price.
In the first few hours, the stock jumped as high as 50.09 (£31.15). Most of those gains held throughout the day, with Twitter closing at 44.90 (£27.92), 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 immediate 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 nine-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.
Named after the sound of a chirping bird, Twitter's origins date back to 2005, when creators Noah Glass and Evan Williams were trying to get people to sign up for Odeo, a podcasting service they created. Odeo did not make it.
By early 2006, Mr Glass and fellow Odeo programmer Jack Dorsey began work on a new project: teaming with co-worker Christopher "Biz" Stone on a way to corral text messages typically sent over a phone.
It was Mr Glass who came up with the original name Twttr. The two vowels were added later. The first tweets were sent on March 21 2006.
By 2007, Twitter was incorporated with Mr Dorsey as the original CEO and Mr Williams as chairman. The pair would eventually swap roles. Both remain major shareholders, though neither runs the company.
Since those early days, the site has attracted world leaders, religious icons and celebrities, along with CEOs, businesses and countless marketers and self-promoters.