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
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