Twitter made an impressive debut at the New York Stock Exchange Thursday morning as shares of the company opened 73 per cent higher than its initial public offering price.
As markets opened on Thursday morning, Twitter stocks began trading at $45.01 per share.
The stock is currently listed at US$45.98 and has reached prices as high as US$50.09.
The opening market prices value Twitter at more than US$31 billion, putting the company in the same range as other lucrative holdings such KFC and Pizza Hut owner Yum Brands and tractor maker Deere & Co.
Twitter, which will now trade under the ticker symbol “TWTR”, placed its initial public offering of stock at US$26 per share on Wednesday, estimating the initial value of the company at nearly than US$18 billion.
Tech expert Carmi Levy told CTV’s Canada AM that Twitter’s impressive market debut was a surprise to many.
“It shows that there is a lot more demand for the share, a lot more people are interested in it than they originally thought,” Levy said.
Twitter’s highly-anticipated trading debut has been carefully planned out and comes more than a year after Facebook’s initial public offering on the NASDAQ, which was plagued with technical glitches and disappointment amongst traders.
Levy said Twitter’s luck in the markets could determine how online social media offerings will be viewed by future traders.
“Facebook was the biggest internet public offering in history. Twitter is going to be the largest one this year, probably the second largest one ever. The fact that Facebook flopped means that a lot of people were left wondering, ‘Is social media the real deal? Is it here to say?’” Levy said.
“If Twitter learns from Facebook’s mistakes, people are going to say that social media really is the real deal,” Levy added.
Twitter, which was first created in 2006, has grown to become one of the largest and most popular social-networking sites on the Internet, attracting world leaders, celebrities and ordinary citizens.
Twitter’s high market share price comes despite the fact that the company has never turned a profit in seven years of existence and has actually lost more than US$400 million in recent years.
In order to maintain its lucrative holding, Levy says Twitter should take advantage of Facebook’s steady decline in popularity as teenage users begin to move towards alternative social media sites such as Pinterest and Instagram.
Levi said that in order to for Twitter’s stocks to remain viable, the company needs to start attracting new users and drive up advertising.
“The game plan here is to grow that user base as much as possible,” he said.
“Obviously Twitter isn’t going to be Facebook’s size any time soon, but if that growth stalls out, you’re going to see that share value take a dive pretty quickly,” Levy warned.
