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.
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.
Click here for reuse options!
Copyright 2013 Communities Digital News
• The views expressed in this article are those of the author and do not necessarily represent the views of the editors or management of Communities Digital News.
This article is the copyrighted property of the writer and Communities Digital News, LLC. Written permission must be obtained before reprint in online or print media. REPRINTING CONTENT WITHOUT PERMISSION AND/OR PAYMENT IS THEFT AND PUNISHABLE BY LAW.
Correspondingly, Communities Digital News, LLC uses its best efforts to operate in accordance with the Fair Use Doctrine under US Copyright Law and always tries to provide proper attribution. If you have reason to believe that any written material or image has been innocently infringed, please bring it to the immediate attention of CDN via the e-mail address or phone number listed on the Contact page so that it can be resolved expeditiously.