Twitter's Value Soars To Nearly $25 Billion
RENEE MONTAGNE, HOST:
NPR's business news starts with Twitter's IPO.
(SOUNDBITE OF MUSIC)
MONTAGNE: As we all know, Twitter began trading on the New York Stock Exchange yesterday, and that little bluebird soared. By the closing bell, Twitter was worth nearly $25 billion.
DAVID GREENE, HOST:
But this initial public offering really began in the middle of the week, with Twitter selling stock at $26 a share to big investors. It went public Thursday, and the price almost doubled.
NPR's Steve Henn reports.
STEVE HENN, BYLINE: On Wall Street, when a newly issued IPO soars in value on the very first trade, that's called a pop. And this is what it sounds like.
(SOUNDBITE OF CROWD CHATTER)
UNIDENTIFIED MAN: Forty-five dollars and 10 cents. Twitter opens at $45.10.
HENN: Just hours earlier, on Wednesday night, Twitter raised $2 billion for itself, selling more than 70 million shares of share of stock to big, institutional investors. Thursday morning, those lucky investors got to start trading their shares of Twitter on the New York Stock Exchange.
Gary Bradshaw was not one of the lucky ones. Bradshaw is a retail stockbroker in Dallas, Texas.
GARY BRADSHAW: I had a handful of clients that were wanting to buy Twitter.
HENN: He'd been getting calls all week.
BRADSHAW: Course, they would all liked to have bought it at the $26 price. Unfortunately, we weren't able to get any stock there.
HENN: In the end, Twitter's share price soared so far, so fast, Bradshaw didn't buy anything. But the investors who got in early made roughly $1.5 billion in a single night.
Some argue that when a stock shoots up this way, the company loses out. It could have raised more money with a more open IPO. But John Kolz, at Credit Suisse, says its not that simple. It depends on the company's goals.
JOHN KOLZ: Do they value getting in more dollar proceeds? Do they value more having their IPO perceived to be a strong success?
HENN: Kolz wasn't involved in Twitter's IPO, but he says sometimes companies want a pop. They're happy to leave a little money on the table, often because they plan to raise more money from Wall Street in the future. They hope their IPO will wet investors' appetites.
While Twitter found an appetite for its stock on its opening day of trading, right now its earnings and revenue make it one of the most expensive Internet stocks on the market.
Steve Henn, NPR News, Silicon Valley.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.