Social network giant Twitter debuted for trading on Thursday—with bids surging above its offering price—in 2013’s most eagerly anticipated initial public offering and the most hyped stock sale since rival Facebook went public more than a year ago.
Although some market analysts have expressed caution about the microblogging site’s lofty valuation and long-term prospects, investors stampeded to the offering. The stock, traded on the New York Stock Exchange, was met with torrid demand that pushed its opening price to $45.10—a 73 percent surge above its pricing Wednesday night at $26.
Twitter’s sizzling debut put its market capitalization above $32 billion–comparable to the size of General Mills, a marquee corporate mainstay founded in 1856–larger than 337 companies in the S&P 500, and three times the size of luxury jeweler Tiffany’s.
Given the well-chronicled problems that beset Facebook’s IPO, Twitter’s offering was being closely scrutinized for any potential hiccups. In 2012, Facebook’s IPO was badly fumbled by the Nasdaq OMX, with the IPO’s afterglow marred by a blizzard of lawsuits, regulatory actions and trading losses for those involved.
Still-fledgling Twitter is running large losses, making some observers wonder about its ability to generate profits in a fickle economy. Meanwhile, the company has been criticized for hosting large numbers of ‘phantom’ users that join the social network, but don’t actively tweet.
“I think we’ve got a tremendous set of thoughts and strategies to increase the slope of the growth curve,” CEO Dick Costolo told CNBC in an interview. “I would consider some of them tactics, some of them broader strategies, in service of doing what I referred to as bridge the gap between the massive awareness of Twitter and deep engagement of the platform.”
Still, the stock’s torrid debut suggests Twitter will raise more than the $1.8 billion figure initially floated, giving the company a total value of above $14 billion by some estimates.
—By CNBC’s Javier David.