Twitter abuzz: Shares surge 73% after hitting NYC floors
The spectacular IPO raise $1.82 billion, with all 70 million
shares sold and gave the San Francisco-based firm a value of
$24.9 billion at the end of trading on the New York Stock
Exchange (NYSE) Thursday, outperforming the IPO expectation of
The IPO, so far, has validated the leadership of CEO Dick Costolo, who took over company reins in 2010, Twitter’s third CEO in 3 years. Costolo said he 'wouldn't change anything' about the 'secret' IPO process, which kept numbers hush hush until just 3 weeks before the IPO.
Investors will wait and see if the 'Facebook slump' hits
the hot social media company stock. The day after Facebook
public on Nasdaq in May 2012, stock fell 11 percent after the
On Thursday, Twitter's social media competitors fell- Facebook by 3.2 percent and LinkedIn by 4.2 percent.
The hot social media company, which has promising
investing, but isn't yet profitable, will rely on investor
interest in its burgeoning revenue.
Its third quarter revenue was $422.2 million. In 2012 revenue almost tripled and reached $317 million. The company filing predicts sales will hit $1 billion in the next year.
Journalists outnumbered traders on the floors at the third
largest IPO in the US this year, after a nine-year old girl (who
herself has a Twitter account) a member of the Boston Police
Department, and actor Patrick Stewart from Star Trek, rang the
Like other social media, Twitter, at any moment,
could be eclipsed by 'the next big thing'. Analysts warn
Twitter’s shares could flop because of the threat posed by new
social media players such as Pinterest, Snapchat, and
The initial public offering was priced at $26.00, higher than the
original pitch of $17.00, and even higher than the final
anticipated range of $23.00-$25.00. The $26.00 share price
decision raised $1.82 billion in the initial public offering,
giving the company a value of $18.3 billion.
To avoid a similar slip-up at Facebook's IPO, when a technical glitch caused delays, the NYSE did a test run for Twitter, predicting trading scenarios to make sure systems could withstand heavy investor traffic.
There are still 554.7 million shares outstanding, as
well as 10.5 million the underwriters have an option to buy
The eight-year-old service only gave potential investors a first peek into its financial records when it released its prospectus in a Security Exchange Commission (SEC) filing on October 3 2013, nearly a month after Twitter announced it confidentially filed for in IPO on September 12.
The IPO will transform top shareholders into stock-portfolio
Jack Dorsey, the co-founder and chairman holds 4.9 percent or
23.4 million shares in the company. Other shareholders include
Evan Williams, co-founder with 12 percent, or a 59.6 million
share stake, Peter Fenton, a Benchmark Capital partner with 6.7
percent, and CEO Costolo with 1.6 percent.
All capital raised on Thursday will go straight back into the
company, Costolo said. IPO money will be used for blazing
international expansion. About 77 percent of users are
international, yet the firm still makes 75 percent of its revenue
inside the US. Ad space ‘per timeline view’ inside the US costs
$2.58, and internationally, only $0.36.
Twitter was launched by CEO Jack Dorsey on March 21, 2006 with
just 24 characters, when he tweeted, "just setting up my twttr."
It has so far attracted more than 230 million users worldwide and
become one of the most popular ways to share information online.
It has become a uniquely live way to share information that
newsrooms, protestors, and public figures use to transmit
information in real time. Katy Perry has the most 'Twitter
capital' - with 46.5 million followers, 7 million more than
Goldman Sachs was listed as the main underwriter, along with
Morgan Stanley, JPMorgan Chase & C., Bank of America Corp.,
Deutsche Bank, AG, Allen & Co., and Code Advisors.