[Updated] Twitter starts trading on NYSE -- company valued at $18.2bn, shares rocket from $26 to $45
Today Twitter makes its debut on the New York Stock Exchange (NYSE). In typical Twitter style, the company announced its share price via tweet, ending weeks of speculation about the price point that would be decided upon.
Rather than the anticipated $15 to $20, the IPO (Initial Public Offering) of 70 million shares are up for grabs priced at $26 each -- effectively valuing the company at $18.2 billion.
The tweet about the flotation reads:
We've price our initial public offering of 70,000,000 shares of our common stock at a price to the public of $26 per share. In addition, we've granted the underwiters a 30-day option to purchase up to 10,500,000 additional shares of common stock. Our shares are expected to begin trading on the New York Stock Exchange on November 7, 2013 under the symbol "TWTR".
The company will be hoping that things don’t go the way of Facebook. When Mark Zuckerberg's social site went public last year the share price crashed very quickly. Fears of another dotcom bubble are likely to be rekindled now that Twitter's initial share price is so much higher than expected. It is not yet clear whether the decision to trade on the NYSE rather than the Nasdaq -- a more usual home for technology related companies -- will have an impact on the success of the shares.
It is Twitter's ability to continue to generate income that will determine how trading continues over the coming months. Recently the company has made a number of changes to its platform including altering the way images are displayed -- fueling rumors that this could lead to an increase in timeline advertising. The direct messaging system was also overhauled to make it possible for people to DM anyone they follow, helping to increase interaction between customers and companies.
It was Patrick Stewart -- he of Star Trek fame -- who rang the bell to signal the start of trading (it was also announced by Twitter via tweet -- but of course!). In less than an hour the price of shares had rocketed from from $26 to $45, inflating the value of Twitter to a staggering $31.5 billion. So, there's been a massive jump in price, but whether it can be maintained remains to be seen.
Do you think $18.2 billion (or the new figure of $31.5 billion) is an inflated valuation? Are you tempted to invest and try to make a quick buck as the share almost certainly jumps very quickly at the start of trading?