Twitter soared as much as 92% in its first day of trading yesterday on the New York Stock Exchange as investors snapped up shares in the popular microblogging site in a frenzy that recalled the days of the dot-com bubble.
The shares opened at $45.10, up from the initial public offering price of $26 set on Wednesday, then added to those gains, hitting a high of $50.
Sources said the flotation drew strong demand, with investors asking for 30 times the number of shares on offer as they bet on potential growth at the money-losing social media company.
The opening price valued the shares at about 22 times forecast 2014 sales, nearly double that multiple at social media rivals Facebook and LinkedIn.
The shares opened 75% above the $26 initial public offering price set on Wednesday, making it the biggest in a series of huge opening day “pops” for IPOs.
Including restricted share units and other securities that could be exercised in the coming months, the company’s market value was over $28bn.
Twitter executives including chief executive Dick Costolo and the company’s three co-founders — Evan Williams, Biz Stone and Jack Dorsey — went to the floor of the NYSE to witness the IPO.
The Big Board, which marked the occasion with an enormous banner with Twitter’s bird logo along its Broad Street facade, snatched the offering away from Nasdaq after the normally tech-focused Nasdaq stumbled with the larger Facebook flotation last year.
British actor Patrick Stewart rang the opening bell at the exchange together with 9-year-old Vivienne Harr, who started a charity to end childhood slavery using the microblogging site.
The microblogging network priced its 70m shares at above the targeted range of $23 to $25, which had been raised once before. The IPO values Twitter at $14.1bn, with the potential to reach $14.4bn if underwriters exercise an overallotment option.
If the full overallotment is exercised, as expected, Twitter could raise $2.1bn, making it the second largest Internet offering in the United States behind Facebook’s $16bn IPO last year and ahead of Google’s 2004 IPO, according to Thomson Reuters data.
The apparently glitch-free opening capped off what was a textbook IPO for Goldman Sachs, which beat arch rival Morgan Stanley to the lead position on the deal.
Goldman tops the list of US technology bookrunners so far this year, with an 18.3% market share, up from 11% a year ago when it ranked fifth, according to Thomson Reuters data.