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Twitter stock debuts at 73% over IPO price


Published:   |   Updated: November 7, 2013 at 11:23 AM

NEW YORK — Twitter’s stock debut at $45.10, 73 percent above its IPO price, valuing Twitter at more than $31 billion. Twitter priced the initial public offering of stock at $26 per share, valuing the company at more than $18 billion based on its outstanding stock, options and restricted stock that’ll 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 the fact that Twitter has never turned a profit in seven years of existence. Revenue has been growing, but the company is also investing heavily in more data centers and hiring more employees.

Twitter’s public stock debut on the New York Stock Exchange was carefully orchestrated to avoid the glitches and eventual letdown that surrounded Facebook’s initial public offering 18 months ago.

Twitter set a price of $26 per share for its initial public offering on Wednesday evening and is trading under the ticker symbol “TWTR” in the most highly anticipated IPO since its Silicon Valley rival’s 2012 debut.

The price value was more than Macy’s, which has a market capitalization of $17 billion, and Bed Bath & Beyond, which is valued at around $16 billion. Facebook Inc.’s value stood at $104 billion at the time of its IPO.

Twitter, named after the sound of a chirping bird, got its start seven years ago, first with Jack Dorsey and then Evan Williams as CEO. Its current chief is Dick Costolo, a former Google executive who once aspired to be a stand-up comedian. On March 21, 2006, Dorsey posted the world’s first tweet: “Just setting up my twttr.” Noah Glass, who helped create Twitter posted the same words just 10 minutes later.

Since then, the social network that lets users send short messages in 140-character bursts has attracted world leaders, religious icons and celebrities, along with CEOs, businesses and a slew of marketers and self-promoters.

Tempering expectations was a big theme in the weeks leading up to Twitter’s IPO. The company tried to avoid the trouble that plagued Facebook’s high-profile offering. Facebook’s public debut was marred by technical glitches on the Nasdaq Stock Exchange. As a result, the Securities and Exchange Commission fined Nasdaq $10 million, the largest ever levied against an exchange. Those problems likely led Twitter to the NYSE.

One of Twitter’s biggest challenges as a newly public company will be to generate more revenue outside the U.S. More than three-quarters of Twitter’s 232 million users are outside the U.S. But only 26 percent of Twitter’s revenue comes from abroad. The company has said that it plans to bring in more international revenue by hiring more sales representatives in countries such as Australia, Brazil and Ireland.

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