Anthony Noto of Goldman Sachs Group Inc. GS -1.47% Goldman Sachs Group Inc. U.S.: NYSE $161.11 -2.41 -1.47% Nov. 7, 2013 1:37 pm Volume (Delayed 15m) : 1.60M P/E Ratio 9.29 Market Cap $73.44 Billion Dividend Yield 1.36% Rev. per Employee $1,264,410 11/07/13 Twitter Soars in Its Trading D... 11/07/13 Michael Sherwood Takes a Bigge... 11/07/13 Goldman: Mortgage Probes May B... More quote
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The sentiment was widely shared among traders, bankers and surely Twitter executives as the social media company's stock traded without incident Thursday morning, opening at $45.10 on the New York Stock Exchange, NYX +0.45% NYSE Euronext U.S.: NYSE $45.46 +0.20 +0.45% Nov. 7, 2013 1:37 pm Volume (Delayed 15m) : 390,757 P/E Ratio 21.92 Market Cap $11.01 Billion Dividend Yield 2.63% Rev. per Employee $1,220,200 11/07/13 Live Blogging Twitter's IPO 11/07/13 The Daily Docket: Atlantic Clu... 11/05/13 NYSE's Prospective New Owner C... More quote details and news » up 73% from the $26 IPO price set Wednesday evening.
With that first trade, at 10:49 a.m., the San Francisco-based short-message service sported a market capitalization of $25.04 billion. That is a heftier valuation than more than half of the companies in the S&P 500 and larger than well-known brands such as Kellogg Co. K -1.48% Kellogg Co. U.S.: NYSE $62.41 -0.94 -1.48% Nov. 7, 2013 1:37 pm Volume (Delayed 15m) : 612,353 P/E Ratio 23.79 Market Cap $22.95 Billion Dividend Yield 2.94% Rev. per Employee $479,355 11/07/13 Twitter Soars in Its Trading D... 11/06/13 Some Food Companies Ditch 'Nat... 11/05/13 The Kellogg's Lesson: Cut Your... More quote details and news » and Whole Foods Market Inc. WFM -9.22% Whole Foods Market Inc. U.S.: Nasdaq $58.52 -5.95 -9.22% Nov. 7, 2013 1:37 pm Volume (Delayed 15m) : 11.46M P/E Ratio 40.02 Market Cap $24.02 Billion Dividend Yield 0.68% Rev. per Employee $177,675 11/07/13 Twitter Soars in Its Trading D... 11/06/13 Whole Foods Reports Higher Pro... 11/06/13 Morning MoneyBeat: Momentum St... More quote details and news »
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What's News: Twitter shares open at $45.10 after pricing at $26 each. Freddie Mac and Fannie Mae will make $39 billion in dividend payments to the Treasury. U.S. economy grew 2.8% in third quarter. Giacometti bronze garners $50 million at Sotheby's auction. Joanne Po reports. Photo: AP
Within minutes of the opening "print," the stock, which trades under the symbol 'TWTR,' climbed.
Shares cracked the $50 mark, up more than 90% from Wednesday night, before declining to stabilize between $45 and $46. The low point in early trading was $44.
The relative serenity stood in marked contrast to the debut of Twitter's social-media cousin, Facebook Inc. FB -2.10% Facebook Inc. Cl A U.S.: Nasdaq $48.09 -1.03 -2.10% Nov. 7, 2013 1:37 pm Volume (Delayed 15m) : 71.04M P/E Ratio 112.01 Market Cap $117.80 Billion Dividend Yield N/A Rev. per Employee $1,487,770 11/07/13 Live Blogging Twitter's IPO 11/07/13 Facebook Courts More Latin Ame... 11/07/13 Funds Feast on High-Quality IP... More quote details and news » A technology glitch in its share sale last year on the Nasdaq Stock Market NDAQ -0.28% NASDAQ OMX Group Inc. U.S.: Nasdaq $35.40 -0.10 -0.28% Nov. 7, 2013 1:37 pm Volume (Delayed 15m) : 278,173 P/E Ratio 17.85 Market Cap $5.94 Billion Dividend Yield 1.46% Rev. per Employee $1,243,020 11/04/13 Nasdaq Sees Normal Opening for... 11/01/13 Nasdaq Suffers Second Systems ... 11/01/13 Trading Halts at a Nasdaq Exch... More quote details and news » delayed the start of trading, generating confusion, and eventually lawsuits.
Twitter went with a different exchange, the New York Stock Exchange, and a different lead bank, Goldman Sachs, although Morgan Stanley MS -0.72% Morgan Stanley U.S.: NYSE $28.92 -0.21 -0.72% Nov. 7, 2013 1:37 pm Volume (Delayed 15m) : 6.54M P/E Ratio 17.07 Market Cap $56.84 Billion Dividend Yield 0.69% Rev. per Employee $660,819 11/06/13 Judge Says Cooper Must Clear H... 11/06/13 Square Exploring 2014 IPO With... 11/06/13 Square Exploring 2014 IPO With... More quote details and news » also returned to play a role. By all accounts, Twitter avoided Facebook's early fate as a public company.
For more than an hour before Twitter opened on the NYSE, traders on the exchange's floor sought to find a price for the open, with bidding pushing the stock higher.
At one point, the NYSE said demand from investors suggested Twitter shares could open at $47 apiece, before the range being called out on the exchange floor began narrowing.
In Twitter's first 30 minutes of trading, more than 47 million of its shares changed hands. About 80 million Facebook shares changed hands in the first 30 seconds of trading on its opening day last year.
Inside Twitter's IPO
The WSJ's best graphics on the Twitter initial public offering, including details on the biggest insider stakes, a rundown of key players and a comparison of its finances with other brand name companies.
How many people get their news from Twitter? Why are those statistics important to Twitter's bottom line? WSJ's Jason Bellini has #TheShortAnswer.
The opening pop that Twitter shares enjoyed—73%—is the sixth-biggest on record for U.S.-listed IPOs that raised more than $500 million, according to data provider Dealogic. It edged out the 72% gain in business software maker Workday Inc. WDAY -1.92% Workday Inc. U.S.: NYSE $75.86 -1.49 -1.92% Nov. 7, 2013 1:37 pm Volume (Delayed 15m) : 371,151 P/E Ratio N/A Market Cap $13.42 Billion Dividend Yield N/A Rev. per Employee $201,907 09/18/13 Salesforce and Workday Cloud P... 09/18/13 Oracle Ekes Out Slight Growth ... 09/11/13 Workday Event Triggers Cloud D... More quote details and news » 's October 2012 opening trade.
The big leap in the share price was good news for investors who purchased the shares Wednesday night. But that didn't include many retail, or individual, investors. They received roughly eight to 12 million of the total 80.5 million sold by the underwriting banks, or around 10% to 15% of the offering. That is a much smaller share than went to small investors in Facebook's IPO, which placed 26%—or over 100 million shares—with individuals.
The narrow trading range once the stock went public Thursday meant that investors who bought shares in the open market had limited opportunity to profit by midday.
Twitter Chairman Jack Dorsey and Chief Executive Dick Costolo, both in sports jackets and Mr. Costolo wearing a tie, were on the floor of the NYSE with Mr. Noto, the Goldman point person on the deal. The executives didn't ring the opening bell.
With the rise in price, Mr. Dorsey's stake in Twitter grew to around $1.1 billion, with Mr. Costolo's reaching $346 million at the open.
Meanwhile, in San Francisco, Twitter employees tweeted pictures of their own gathering inside Twitter headquarters, where they watched their CEO appear on CNBC before the open.
Wall Streeters and other market observers immediately weighed in on the fresh valuation.
"It is an eye-popping valuation," says Anant Sundaram, a finance professor at Dartmouth's Tuck School of Business. "I am at a loss to explain even a tenuous connection to fundamentals."
Pivotal Research Group senior analyst Brian Wieser downgraded his rating on Twitter to sell from buy immediately after the stock started trading. He put a $30 price target on the company, about 33% less than Twitter's opening price.
"With a price that pushes into the high 30s and beyond, Twitter is simply too expensive," Mr. Wieser said.
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