Twitter, the 140 character microblogging platform, has set the stage as one of the largest technology initial public offerings (IPO) ever with shares at $26 each.
September 2013 was the time Twitter first announced that it would file an IPO. The company revealed its prospectus in an 800-page filing on Thursday, 24 October 2013. Twitter said it planned to sell 70 million shares with a price of $1.82 billion. The offering represents about 13 percent of the social media that values at as much as $11 billion.
On 7 November 2013, the day for IPO, shares for Twitter closed at $44.90, up more than 73 percent from their initial price of $26 each. This means that Twitter is valued at a little over $31 billion (£19 billion) at the end of the day.
More than 13 million shares were traded once they became available an hour after the New York Stock Exchange (NYSE) opened. Twitter's IPO is the biggest technology listing since Facebook's IPO in 2012.
First Day Debut
Shares in newly-listed companies are often volatile and unstable on their first day of trading. Within minutes, Twitter's stock price increased to more than 80 percent before closing just below its initial opening price of $45.10 per share.
When Facebook launched on NASDAQ, its shares were priced initially at $38 each. The stock soared within hours of its debut to a high of $45. But its price later suffers major decline. Facebook only recovered those losses by 11 September 2013, when shares again touched $45.
To prevent Twitter's stock sale from having a similar fate, the NYSE ran tests on 26 October using larger-than-normal share volumes.
Twitter, the New Public Company
The company, a 140 character microblog with about 232 million active users. According to its IPO documents, these users send 500 million tweets a day.
Twitter's financials have been under greater scrutiny since it announced its plan to float, especially given that the company is still loss-making.
It lost $69 million in the first six months of 2013, on revenues of $254 million. About 85 percent of revenues come from advertising on its site, and more than 75 percent of Twitter users access the site from their cellphones.
Mary Jo White, head of U.S. regulator the Securities and Exchange Commission, recently warned investors to be cautious of the metrics used by technology companies like Twitter, noting that investors have become overwhelmed by the sheer magnitude of data.
"In the absence of a clear description, it can be hard not to think that these big numbers will inevitably translate into big profits for the company," she said in a speech. "But the connection may not necessarily be there."
Although Twitter's CEO Dick Costolo said that none of the founders would immediately be selling their shares. The company's co-founder Evan Williams that has a 10 percent stake in Twitter, is the biggest shareholder. That stake is now worth a little over $2 billion. Jack Dorsey, another of its co-founder, also made a fortune from the IPO with his 4 percent stake that worth more than a billion dollars. Another co-founder, Biz Stone, is thought to have made millions of dollars by selling share stakes over the last few years.