Twitter has debuted on Wall Street with a bang as shares in the fast-growing social network soared amid investor frenzy over the most-anticipated listing since Facebook.
The shares shot up by more than 90 per cent in early trade to as high as $US50. The stock closed with a spectacular one-day gain of 72.69 per cent at $US44.90, from the initial public offering (IPO) price of $26 per share set on Wednesday.
While some analysts cautioned about the fast-changing nature of social media, the debut led to a stampede for Twitter, known for its one-to-many messages of up to 140 characters.
Appropriately, #TwitterIPO was among the top trending topics on the social network.
“Kudos to Twitter for orchestrating a highly successful IPO,” said Lou Kerner of the Social Internet Fund.
“However, as Facebook showed, an IPO success, or disaster in Facebook’s case, is really just noise in the long term. Twitter’s success as a stock is going to be based on how the company performs.”
Kerner said Twitter “needs to perform extraordinarily well, in terms of user growth, user engagement, and user monetization to justify its price”.
The key Twitter founders attended the opening on the New York Stock Exchange, along with Star Trek actor Patrick Stewart and a nine-year-old girl who operates a lemonade stand.
“Honored to join @ev @jack @biz @dickc & the @Twitter team at their historic IPO this morning,” Stewart tweeted, referring to founders Evan Williams, Jack Dorsey, Biz Stone, and Twitter chief executive Dick Costolo.
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“We have a lot of work ahead of us” Costolo told CNBC television from the floor of the stock exchange. “All the capital raised by this is going into the company.”
Asked about Twitter’s growth potential, Costolo said, “It’s all about making it very simple and easy for new users to come to the platform … we all have examples of why this service can be useful to everyone on the planet.”
Cantor Fitzgerald analyst Youssef Squali was upbeat on the company, saying in a note to clients that “Twitter is based on a one-to-all, all-the-time broadcast distribution model, and as such, fulfills an unmet need.”
“This model is highly complementary to traditional media outlets (especially TV), and fulfills the need for up-to-the-minute, trending information in real time,” the note said.
But Brian Wieser at Pivotal Research issued a “sell” recommendation after the opening, saying Twitter “is simply too expensive” after the hefty opening gains with “nearly the same valuation as CBS … or even Yahoo”.
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