Twitter stocks surge as celebrations are held on Wall Street

The NYSE opened today to much press attention as Twitter began trading with an IPO priced at $26 a share. Prices immediately rose to as high as $50 at one point before falling slightly to $45.10. Twitter logos covered the NYSE as the floor opened, with the official Twitter account determining a hashtag for the celebrations: '#ring'.

Financial Times reports that the company is now valued at $31.2 billion, up from the original $18 billion valuation for the IPO. CEO Dick Costolo is quoted to have favoured "clean and methodical" processes today, as he remains confident about Twitter's future. He also commented on recently international investments, which may finally help Twitter break a profit after some financially woeful years.

We will continue to make those investments as long as we see tremendous growth.

By selling 70 million shares, the microblogging service, that now has over 230 million users, will raise close to $2 billion. Twitter's IPO documents report that over 500 million tweets are sent per day, yet it still lost $69 million in the first six months of 2013.

In addition to broadening Twitter's investment prospects, all of Twitter's cofounders have been left significantly better off. Evan Williams' 10% stake is now worth over $1bn, and Jack Dorsey is now almost half a billion richer.

It is worth remembering that stock prices of new companies are never safe, as seen when Facebook's IPO price rose to $45 before slumping significantly. It now sits at $48, with little sign of serious growth. We can only hope Twitter will fare better.

via: Financial Times and BBC | Image: Getty Images

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28 Comments

Commenting is disabled on this article.

If you miss the IPO by that much, you did something wrong.

IMO Twitter has a value, unlike Facebook, but monetizing it is not going to be easy.

I'd argue Facebook has significantly more value than Twitter has. Hoarding the personal information about everyone is worth significantly more than short random brain farts of people that twitter has.

In terms of an advertisers dream (Google's for example), knowing everything about you would make your product worth so much more as an advertiser, whereas Twitter doesn't have that benefit, it really has minimal value at all as far as I can see.

Maybe I'm looking at it wrong, but I don't see Twitter as anything more than a fool's bubble.

You could infer just as much about a Twitter user as you could a Facebook user. Google still holds all the cards there, as they get a direct line into people's wants.

If you look at the marketing behind them, Twitter is easier to get involved with, and assuming your target market is not all middle aged people or older, you'll get better interaction on Twitter. Not to mention, Twitter is becoming the "go to" news source for real time updates. With Twitter you're broadcasting a message, on Facebook you're just slapping it on a wall and hopping people see it. They have a lot of similarities, but I think they way users interact with the services is very different.

Facebook, I will admit, does have messages, which they would love to have take over e-mail so they can data mine the **** out of that, but I don't see that happening any time soon.

Ideas Man said,
I'd argue Facebook has significantly more value than Twitter has. Hoarding the personal information about everyone is worth significantly more than short random brain farts of people that twitter has.

There's no even a reason to argue that. Facebook is more valuable by all generally accepted valuation methods. On the other hand, you're paying 25 billion for Twitter if you buy right now but buying Facebook is 115 billion. The arguable question is if Facebook is 4.5 times more valuable going forward.

the market cap of twitter is highly inflated and its just a matter of time before it bursts just like facebook. I also expect apples overvalued stock to fall significantly over the next three years if it cannot start growing its profit margins again.

If there's any real value in it, I think Twitter much more effective as a platform for marketing than Facebook.

Tweets are easily accessible and spread like wildfire. It's easy for any celebrity or anybody famous to plug or shill whatever product/service/idea/endorsement. I don't use Facebook or Twitter but I still see tons of tweets being posted around all the time. I never see anything from any celebrity, public figure, etc from Facebook. You have to get on their friends list or join and like them or something.

If there is supposed to be publicly viewable pages on Facebook then I never see them because everytime I try to load a Facebook link it all gets hidden behind ad elements that are blocked by plugins (Adblock, Ghostery, script blockers and such). Twitter does not do this. Even with nothing whitelisted I can still see a tweet.

After the initial rush, I expect smart money will dump this and lots of people will be like "wow that was unexpected". Like FB was... right...

"yet it still lost $69 million in the first six months of 2013."

Umm.... why would any investor dump their money in them? This is just going to make the company tank super hard since I can't imagine their revenue sources are as deep as Facebook's. Facebook even sunk badly at first, but just recently finally they can bring in money.

I understand why people like to use Twitter but I dont see what these wallstreet traders see in it. Some are rightfully wondering whether or not it is a bubble. At this point its not a question, it simply is a bubble. Any growth in stock value is part of that bubble as Twitter has done nothing to expect they can turn it into profit.

Twitter is just like any other young internet company. Sure there are some tallented programmers and creative people in there. But why should they specifically a billions? If these traders fear they are missing out on the next big tech company then why not put a few Thousand dollars into the pocket of every young start up? Any of them could be the next big one.

Twitter has one popular service but it never was original and it is easily copied. Its basically a micro-blog. They were just the first to present it in a simpler more accessible package. I think the owner is aware that as it stands Twitter isnt capable to make a profit. All it has is millions of users. Its not nearly as big as Facebook, most accounts arent nearly as active and given its nature it will never be as mainstream as Facebook either. Its already past its peak in popularity. So from the owner's perspective its the perfect time to cash in some chips and let wallstreet ride it into the ground.

Agree %100, its another bubble...Twitter doesn't turn profit so its value is really...nothing, speculation and BS

Ronnet said,
I understand why people like to use Twitter but I dont see what these wallstreet traders see in it.

I agree, this is a much better point than "I don't understand Twitter". I think it's part social bubble effect, and part just hoping that Twitter will find a good use for their massive user base. But I don't think that will be easy. Push ads too hard and you'll lose them. This all needs to be handled delicately as well as with good visionaries on the board.

Lone Wanderer Chicken said,
I never understood why Twitter is so allegedly popular.

Me neither.... " I am seating on the toilet", "I am drinking a glass of wine"....

Me neither.. but the funny thing is that many people that don't understand stock would claim Twitter is worth more than MS since Twitter is in the 45-50 range and MS in the 30s. So this could spell out bankruptcy for MS in the MS haters mind... hahaha

Fritzly said,

Me neither.... " I am seating on the toilet", "I am drinking a glass of wine"....

Like with most things, its all in how you utilize it. If you are following people who just state what they are doing ala facebook, then stop following your friends.

Twitter is extremely useful if you use it like a news feed. I follow tech sites, News Sites, CEO's, financial experts ect. So my timeline is strictly for me to absorb useful information, and obtain links to stories I may have an interest in extremely quickly. These people broadcast important or useful information to twitter first, because its a simple stream thats perfect for this type of activity.

I do not follow friends/family on twitter. We have easier forms of communication (phone/text/email).

dtboos said,

Like with most things, its all in how you utilize it. If you are following people who just state what they are doing ala facebook, then stop following your friends.

Twitter is extremely useful if you use it like a news feed. I follow tech sites, News Sites, CEO's, financial experts ect. So my timeline is strictly for me to absorb useful information, and obtain links to stories I may have an interest in extremely quickly. These people broadcast important or useful information to twitter first, because its a simple stream thats perfect for this type of activity.

I do not follow friends/family on twitter. We have easier forms of communication (phone/text/email).


Exactly this, plus the fact that it's a two way stream, so you can actually get tech support, or be part of the conversation. So in that way, it's much better than an RSS feed.

How anybody enjoys using the website is beyond me though. Tweetdeck or an alternative is a must, in my book.

Lone Wanderer Chicken said,
I never understood why Twitter is so allegedly popular.

Its nice if you like to collaborate with a certain group of people. Like, for ed tech, its a great way to get ideas, meet people, get help/suggestions on what new tech route to go, etc, etc, etc. =)

coderchi said,
Me neither.. but the funny thing is that many people that don't understand stock would claim Twitter is worth more than MS since Twitter is in the 45-50 range and MS in the 30s. So this could spell out bankruptcy for MS in the MS haters mind... hahaha
That's not how the stock market works

Lone Wanderer Chicken said,
I never understood why Twitter is so allegedly popular.

For many, it's a useful realtime news source that they can customize easily. Facebook is nothing like it when it comes to live news, and then you basically only have Google+, or having to search up the news on regular web sites rather than having it delivered to you.

Then add everyday talk with friends you follow to this, without involving games and apps that auto-spam your stream.

I personally find it easy to see why Twitter is fairly successful, without being a heavy user myself.

Fritzly said,

Me neither.... " I am seating on the toilet", "I am drinking a glass of wine"....

If you follow people going on about such things, that is also what you are going to get. I don't. I mostly follow tech news, photography sites and photographers, and the occasional well-known "tech profile". All these things are relevant to my interests, and then I don't exactly get stuff about what their poo looks like.

Northgrove said,

For many, it's a useful realtime news source that they can customize easily. Facebook is nothing like it when it comes to live news, and then you basically only have Google+, or having to search up the news on regular web sites rather than having it delivered to you.
I personally use Twitter as an RSS feed, I subscribe to all the sites I used to visit and I can see when there's an update for them. Facebook can't do that because the relationship has to go both ways, but with Twitter you following someone doesnt mean they follow you back