Twitter held its initial public offering on the New York Stock Exchange this morning, opening its stock up for purchase to any interested investor, and as it turns out, there were many. Shortly after trading began around 9:30 AM ET, Twitter's share price rocketed well past the $26 per share minimum the company set last night, opening up 74 percent at $45.10 to start the day. It finished the day right around the same spot, at $44.90.
The minimum strike price of $26 allowed Twitter raise at least $1.8 billion dollars from the initial offering, and gave the company a total valuation of roughly $14 billion. So Twitter potentially left about $1.25 billion on the table when they set the price of $26 a share last night. But this is a delicate dance, meant to reward the bankers and their clients who agreed to buy up the stock ahead of time.
The company was most concerned about having a clean opening that will give the stock positive momentum, the opposite of what occurred with Facebook. Indeed, so far, Twitter's initial hours as a public company have been in many ways the reverse of Facebook's public offering on the rival NASDAQ stock exchange back in 2012, when computer glitches caused the stock price to slide early. The NASDAQ later paid out $10 million to settle civil charges from the US Securities and Exchange Commission over the glitches, the largest fine yet levied against a stock exchange.
"We've been preparing for this for several weeks now," said Scott Cutler, executive vice president of global listings at the NYSE. "We actually had four IPOs today, and everything went exceptionally well."
Meanwhile, Twitter is on pace to earn around $500 million in revenue this year, but so far has recorded a loss of $69 million in 2013 and does not expect to be profitable. The IPO is still a hit with investors, however, who are hungry for any opportunity to access serious growth amid a global economic slowdown.
Twitter's business is most often compared to its rival Facebook, which raised a whopping $16 billion during its IPO in 2012. Facebook has more than 1 billion users, compared to Twitter's 230 million, and had shown it could be profitable prior to going public. That makes Twitter a far riskier bet, but investors are hoping to capture more of the upside as it transitions from a young company to one with a mature business.
Twitter, founded back in 2006, has raised a total of $1.16 billion in venture capital. It has had a tumultuous history, with founders Jack Dorsey and Ev Williams battling for control. Eventually a friend of one of the founders, Dick Costolo, was brought in to restore order and put the site on a path to profitability. Under his leadership, Twitter finally managed to solve its issues with the downtime "fail whale," making it stable enough to build a real advertising business and pursue partnerships with big media companies. Sir Patrick Stewart, a recent convert to Twitter, was on hand to help ring the opening bell.
Dante D'Orazio contributed to this report.
Comments
#moneygrab
Twitter does have mainstream viability, more so than facebook IMO… but this is quite the IPO…
By smiden on 11.07.13 9:30am
Twitter is a way bigger part of daily life for anyone in media or finance than Facebook, but I don’t know if I agree it has more mainstream viability.
By Ben Popper on 11.07.13 9:34am
Totally get what you’re saying but try something for me. Create an account if you don’t have one, and then tweet at a brand that you use. For example, I had an issue with my cable and tweeted at the provider at 10:00 at night. Within 2 minutes I had a response asking for more information and suggestions.
If they play their cards right Twitter could become the place that companies interact with their customers and potential customers. Forget waiting on a hold line, a customer service rep can handle 10 complaints at a time using Twitter. That’s what I think the real future is for Twitter. They’re long past mundane live-tweeting.
By Netazah on 11.07.13 1:32pm
Not just companies, but politicians as well.
That said, I just don’t understand why Twitter is so embraced, when all it is is a crippled version of Facebook. Is there ANYTHING you can do on Twitter that can’t be done on Facebook? Pardon my ignorance if there is a lot of stuff.
By mattkicksass on 11.07.13 2:00pm
Well according to Dorothy14 you can make serious cash on Twitter.
By the hate machine on 11.07.13 2:46pm
I don’t use twitter anymore, but imo, it beats facebook in its focus on simplicity. Facebook sometimes has too much going on
By Infinitesimus on 11.07.13 3:01pm
I feel Facebook will be around longer than Twitter. The got this IPO wrong, people highly underestimate Facebook’s staying power.
By VoxMediaUser601442 on 11.08.13 5:44am
You’re right, but it’s the simplicity that works. There’s nothing you can do with SMS that you can’t do with email on a smartphone, but it’s still the easier way to communicate.
If you get 10 notifications on Facebook, they could be for 10 different things and you might not care about any of them. If you have a notification on Twitter you KNOW it’s because someone talked to or about you. Very dialogue-focused.
By KashifPasta on 11.07.13 5:14pm
less drama because less words you can say i guess.
By King Jamaican on 11.08.13 3:45pm
Yeah, but in terms of mainstream viability, people are not going to get a twitter account just so they can tweet at their cable provider. Its still not as widespread as FB and may never be.
By AnjoMan on 11.07.13 3:11pm
73% up.. well then i know how much it will go down once they release first quarter results. The fact that Twitter is occasionally really useful (webcare) doesn’t mean they are financially doing ’’good’’. Looking at the current financial results Twitter is worth no more than $9-12/share.
By ROMSPARKX on 11.08.13 3:08am
No, any company that’s been around for seven years and lost money every on of those years will not be worth $9-12/share. They will be a penny stock at best.
By trainoffools on 11.08.13 8:44am
Twitter has its uses for very specific groups of people, such as those in media, finance, and tech. But average people really have no reason to use Twitter. It’s not even particularly important for following celebrities, which is the only thing on Twitter most average people are interested in. For example, I know a guy who follows a lot of athletes on Twitter by reading posts on other sites about their tweets/pics – he never actually goes to Twitter.
A lot of people say that Twitter is important for breaking news. But it’s the same situation as with celebrities – the important stuff from Twitter gets relayed to TV news networks, which is where most people then consume it.
On the other hand, Facebook is inescapable. It has a lot lower learning curve than Twitter, and it’s not open for people to read without signing up. This means that Twitter is much more of a one-to-many medium than Facebook.
By exus on 11.08.13 8:23am
I’m on Facebook every day. I’m not with Twitter. Twitter, for social, is thoroughly obnoxious. I can see Twitter used by “marketers,” brands, and media. But for purely social reasons, I don’t understand why anyone would be on Twitter.
By cutis on 11.08.13 5:09pm
Definitely has a better chance at this than Facebook.
By pekosROB on 11.07.13 10:32am
Celebrities, news outlets, teachers, students, everyone pretty much uses twitter. Even I started using twitter about two years ago and I thought I would never use it.
By mr_duong567 on 11.07.13 9:43am
What do you use it for? Honestly, I have an account, I’m a marketer, and I still can’t find any real value.
The only thing I use twitter for is to search if people are complaining about tech services going down to make sure I’m not the only one having a problem on my server/DNS/email host, etc.
By lazycrazy on 11.07.13 9:48am
I use it to keep up with sports, news, and friends/other interests. Most sport and news updates hit twitter right away, so it’s a one stop shop for me to get all the info I want about a particular subject.
By selfprofessedgeek on 11.07.13 9:51am
Google+ does this job 10 times better than Twitter, it’s much more user friendly. Twitter is probably the least user friendly way of keeping up with news. You get 0 filter, it’s all over the place, takes a lot of time to get out the important information out of it.
Even subscribing to RSS feeds is more user friendly than twitter.
By lamamafia on 11.07.13 11:36am
Concerning G+, that may be true for Google and its services but for other topics it’s worthless IMO.
By quadrige on 11.07.13 11:43am
I get my news almost 100% from G+. I have all my tech websites there (except a few like Anandtech), I have my local news, my country news, international news, finance news, automotive news, science news. I have everything. And the best of it is that when I see that a page has better quality/post ratio, I put it in an exclusive circle with notifications. I do this with my friends and a bunch of pages that consistently post something good and relevant.
Find me a service with this amount of customization.
There are less famous people, but to be honest, it’s really not like I cared. I don’t mind not knowing what Celine Dion has on her mind at all times.
By lamamafia on 11.07.13 11:52am
Google +, are you kidding me? Sounds like you use Google + as more of an RSS reader, for keeping up with news. Twitter serves very different purposes, IMO. Only a small part of that is news.
Twitter has lists, which are not really that different from Google + circles from a consuming point of view. The problem with Google + is that it just doesn’t have anywhere near the number of active users compared to Twitter. The beauty of Twitter is in its simplicity. My twitter feed is manageable and I read every tweet. But I often use twitter for searching the fire hose of the public feed. Very useful for finding up to the minute information from multiple sources, and peoples’ opinions.
By purfikt on 11.07.13 11:59am
The only people I know that tout google+ are google employees…
By rockacello on 11.07.13 1:49pm
Or people who’ve actually used it and liked it.
By VoxMediaUser640363 on 11.07.13 4:20pm
google employees
By juf on 11.07.13 5:21pm