Twitter’s shares surpassed all expectations on their first day of trading – soaring from the $26 offer price to – at one stage over $50. That was a 92 percent jump.
The buying frenzy reflected the fact that investors wanted to own many more shares than were on offer.
Despite the high volume of trades, things went smoothly in contrast to Facebook’s experience.:
Max Wolff, Chief Economist at ZT Wealth said: “We saw a very nicely staged managed IPO of a very exciting company with obviously huge demand. We had already heard that it was over 30 times oversubscribed.”
So do the numbers add up? There are 500 million tweets and 100 million people using the micro-blogging service each day.
Twitter says it made 73 US cents from each user in the third quarter.
And in the first nine months of this year it lost $134 million dollars (100 million euros).
Even though it has yet to make a profit, the people buying Twitter shares are betting on potential earning growth by the social media company – much as others did earlier with Facebook.
There were worries about how Facebook would sell adverts on mobile devices, but it has actually enjoyed big earnings growth in that area.
Twitter does boast over 230 million monthly active users – including world leaders and celebrities – but that is dwarfed by Facebook’s almost 1.2 billion.
That means Twitter lacks Facebook’s ubiquity or the “stickiness” factor that keeps people checking the number one social network so often.
And on a day that recalled the heights of the dot-com bubble, investors might also ponder a recent survey that showed more than a third of people who signed up for a Twitter account say they do not use it.