Twitter IPO explodes over 81 percent in opening NYSE trade

Twitter IPO explodes over 81 percent in opening NYSE trade

WASHINGTON, November 7, 2013 – Shares of the Twitter (TWTR) IPO blasted into the stratosphere this morning when the issue opened for trading at approximately 10:50 a.m. EST at an apparent price just short of $45 per share. Twitter was priced last night at $26 per share, slightly above the earlier estimated price range of $23-25 per share, which itself was a jump from the $17-20 range estimated at the beginning of this week.

As of 10:57, the stock had gone even higher—to $48.15—and is now trading slightly lower as we prepare to post this article. The stock is likely to gyrate considerably as the day progresses as it was vastly oversubscribed.

Earlier, Twitter officials helped ring the 9:30 a.m. opening bell at the New York Stock Exchange where the company’s shares were scheduled to begin trading once the opening trade price and range were confirmed by Barclay trade specialist Glenn Carrell who works on the floor of the exchange. This human element—now regarded by many in the business as archaic—nonetheless may help smooth the chaos that resulted from the NASDAQ’s big time all-electronic botch of the notorious Facebook (FB) IPO.

Twitter’s trading debut was the most highly anticipated since Facebook’s last year. There were earlier indications that Twitter could start trading at up to 81 percent above its IPO price and the initial trades confirmed that estimate.

At its IPO price of $26 per share, Twitter—which has never made a profit—was being valued at more than $18 billion based on its outstanding stock, options and restricted stock that will be available after the IPO. The pricing means the short messaging service will raise $1.8 billion in the offering, before expenses.

The high price comes despite Twitter’s inability to turn a profit in its seven years of existence. Revenue has been growing, but the company is also investing heavily in more data centers and hiring more employees.

The Maven was actually able to obtain 100 shares on the offer, so we’ll be following the issue closely today and will issue updates if trading action remains frantic.

At this point, we’d also reiterate our earlier advice for small investors not to chase the issue at current prices. That’s generally, though not always, proved to be a losing proposition in hot IPOs.

—AP contributed to this article

Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate. He currently holds a small position in FPX and has just acquired a small amount of TWTR on the offer).

Positions mentioned above describe this author’s own investment decisions and should not be construed as either buy or sell recommendations. The current market is highly treacherous and all investors travel at their own risk, so caution should be exercised at all times.

Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.

References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any article under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.

Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.


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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17