Investors proved today that they have faith in Twitter’s ability to turn its 200 million monthly active users into a profit. At a $45.10 opening price, Twitter’s market value is somewhere near $25 billion. WOW.
Shares of Twitter traded between $45 and $47 in their first hours on the New York Stock Exchange on Thursday morning, under the ticker symbol “TWTR.” The company and its underwriters, led by Goldman Sachs, on Wednesday evening had set a starting price for the stock of $26. At the stock’s $45.10 opening price on Thursday, the seven-year-old company had a total market value of more than $25 billion, making it worth more than companies such as Kellogg, Netflix and Whole Foods and twice the value of iconic aluminum giant Alcoa.
Trading was delayed for more than an hour after actor Patrick Stewart, a star Twitter user, rang the NYSE opening bell at 9:30 a.m. ET, while market specialists sorted out buy and sell orders for the stock.
But once it started trading, Twitter immediately got on track for an 80 percent first-day jump in its stock price, harkening back to the go-go days of the tech-stock bubble in the late 1990s. The gain was so great that even CNBC yeller Jim Cramer, an early Twitter cheerleader, on air called the valuation “worrisome.” “It can’t be justified,” he wrote. In a tweet, of course.
Fittingly, Twitter’s hyped IPO comes at a time when some market watchers are starting to warn of a new bubble forming in stocks. The Dow Jones Industrial Average and Standard & Poor’s 500-stock index are at record highs, and the tech-heavy Nasdaq is at its highest levels since early 2000, just after the tech bubble burst.
Read more from the source: The Huffington Post