Twitter up more than 72 Percent on IPO
NEW YORK – On Thursday, shares of Twitter (NYSE:TWTR) began trading on the New York Stock Exchange (NYSE:NYX). The highly anticipated IPO was met with euphoria as shares shot up more than 72 percent from the opening price of $ 26 per share. The opening price itself had moved up in recent days from the initial range of $ 17 to $ 20 per share, then to $ 25 per share on Tuesday.
On Wednesday, the share price was set at $ 26 per share and eventually began trading at $ 45.10 at 10:30 A.M. In the company’s first hours on the market, shares rose to an intra-day high of $ 50.09. However, questions remain about the company’s valuation, which reached $ 31.7 billion, as Twitter has yet to turn a profit. Now that the company is publically trading, management is certain to face increased scrutiny of their performance.
Some analysts have cautioned that Twitter maybe be overprices. Brian W. Wieser of Pivotal Research, who had a price target of $30 on Twitter before the shares began trading, downgraded the stock to sell, calling shares of Twitter ‘simply too expensive.’ For investors, they should take a cautious view on Twitter. While the company is changing how we communicate, they have yet to turn a profit and it is likely that shares will dip below their first day close.
The IPO also highlighted the differences between the tech heavy NASDAQ (NASDAQ:NADQ) and the NYSE. According to Ryan O’Day of Rosenblatt Securities, ‘it’s great we have the human element to control it rather than the computer system at NASDAQ.’ The offering was a significant victory for NYSE Euronext in its long-running competition with NASDAQ for premier stock listings. The NYSE has regularly attracted more total listings than NASDAQ, but NASDAQ has been more popular and has long been identified with technology companies. Apple (NASDAQ:AAPL), Facebook (NASDSAQ:FB), Google (NASDAQ:GOOG), and Microsoft (NASDAQ:MSFT) all trade on the NASDAQ.