Twitter shares jump 92 in frenzied debut

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 Inc and LinkedIn Corp.

The shares opened 75 per cent 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 firms market value was over 28 billion.

Twitter executives including chief executive Dick Costolo and the companys three co-founders Evan Williams,Biz Stone and Jack Dorsey went to the floor of the NYSE. The Big Board,which marked the occasion with an enormous banner with Twitters 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. Facebook was so overhyped, said Kenneth Polcari,a senior floor official at ONeil Securities Inc. Twitter isnt like that,though you can feel the excitement.

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. Twitters building staff opened its offices in San Francisco extra early,at 5:30 a.m. on Thursday. By 7:30 a.m.,hundreds of employees had flocked to their 9th floor cafeteria to watch Stewart ring the opening bell on TV while eating cronuts, a croissant-donut hybrid,made by Twitters resident chef,Lance Holton.

The IPO values Twitter at 14.1 billion,with the potential to reach 14.4 billion.

Early investors waiting for big gains

new york: Mutual funds run by T Rowe Price Group Inc and Morgan Stanley are poised to send one sweet tweet.

These early investors in Twitter Inc will reap exponential gains as the microblogging site goes public,while latecomers struggle for share allocations. T Rowes New Horizons and Growth Stock funds may come out looking smartest,having scooped up millions of preferred shares for a pittance. From its inception in 2006 through the end of September,Twitter completed several rounds of equity financing as a private company by issuing convertible preferred stock that raised 759 million. reuters

Twitter vs Facebook IPO

Twitters stellar market debut is in sharp contrast to the debacle that Facebook witnessed in its IPO in May last year

SMALLER IPO SIZE

The Twitter issue is much smaller. Facebook increased the size of its IPO in the days leading up to it and raised 16 billion. While Twitter did hike the IPO price as demand rose,it did not upsize it.

VALUATIONS VARY

Twitter raised some 1.8 billion and the IPO gave the company a valuation of between 14.4-18 billion difference on account of restricted shares. Facebooks IPO valued the company at more than 100 billion.

NO BANKER SUPPORT

Twitters shares did not need massive back-end support from its bankers to ensure that the scrip traded above its IPO price. In May 2012,Morgan Stanley had to work doubly hard to buy the Facebook stock to keep it above 38.

NYSE NOT NASDAQ

Twitter skipped Nasdaq the preferred listing bourse for Silicon

Valley tech firms and instead chose the NYSE. The Facebook IPO was rung in by Mark Zuckerberg on Nasdaq at a ceremony in Menlo Park,California.

A SMOOTH RIDE

There were no glitches and Twitter started trading on Thursday morning without any issues. During Facebooks listing,a problem with Nasdaqs computer programming delayed trading for 30-odd minutes,forcing Nasdaq to cough up a 10 million fine to the SEC and compensation to brokers who lost money.

FEWER USERS

With some 230 million active users,Twitter has about a fifth of the user base of Facebook today. When it went public,Facebook had some 900 million users.