Twitter Flies High in Stock Debut
Posted on Nov 7, 2013
Love it or hate it, but Twitter, the social-media stalwart that got everyone thinking in 140 characters or less, was the darling of the NYSE on Thursday after TWTR shares closed 73 percent higher than the preset IPO asking price of $26.
However, those online stocks are unpredictable creatures (see: Facebook; also see: dot-com bubble), and Twitter was already showing signs of vulnerability by the closing bell. After nudging past $50 before noon, shares dropped to $44.90 at the end of the day.
Also, as The Associated Press pointed out in a first-day summary, Twitter has yet to turn a profit in seven years. That said, the company clearly paid attention to the hard-won lessons Facebook learned from its first foray on the stock market last year:
In the first few hours, the stock jumped as high as $50.09. Most of those gains held throughout the day, with Twitter closing at 44.90, despite a broader market decline.
The narrow price range indicated that people felt it was “pretty fairly priced,” said JJ Kinahan, chief strategist at TD Ameritrade.
The immediate price spike “clearly shows that demand exceeds the supply of shares,” said Wedbush analyst Michael Pachter.
—Posted by Kasia Anderson