Twitter IPO Soars as Markets Tumble
(NEW YORK) -- On its first day trading as a publicly held company, Twitter stock closed at $44.90, up 73 percent from the IPO price.
That means the company has a market value of $24.5 billion.
Even though the stock closed a bit lower compared to the open price, Twitter’s public debut went smoothly compared to Facebook’s technologically challenged IPO.
Twitter stock (NYSE: TWTR) rose 74 percent on the open to $45.10 and hit $50 at one point – almost double its $26 offer price. Retail investors who bought at $50 took a haircut. The lucky few institutional investors and their favored clients who got in at $26 made a bundle.
Twitter makes its money from advertising and like almost any media company has to strike a balance between revenue and clutter that could potentially turn users away. The company has never made a profit, though revenue is rising swiftly.
Only time will tell whether Twitter remains an indispensable social media service or whether it turns into an unenviable has-been like MySpace and Friendster.
The markets in general did not have as good a day as Twitter; all three major indices ended the day down. The Dow closed down 152 points, the S&P 500 was off 23 and the Nasdaq finished down 74 points. Good news about the U.S. economy had investors worrying that the Federal Reserve will pull back on stimulus.
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