IPOs may involve some of the riskiest things in investing, but the Twitter IPO seems to be golden. While doubts about the initial $23 to $25 share price were flying all over the place a day before the Twitter IPO, a day of trading has shown things in a different light. On the day of the IPO itself, Twitter went a little higher than estimates and offered its shares at $26 a piece.
After one day of trading, even that initially seemingly high price looks measly compared to the ending stock price of $44.90! That’s a whopping 73 percent surge, which should be more than enough to make the Twitter guys rather satisfied with themselves. After all, IPOs in this niche have not always been all smooth sailing, Facebook being the main example. Reportedly, Twitter’s CFO’s goal while planning the IPO was to avoid becoming the next Facebook, Inc.
With the current stock price, I think it’s safe to say that they have achieved that goal to a great degree. If $44.90 per share does not mean much to you, think about the valuation that leads to: $24 whopping billion.
That puts Twitter in the league of Netflix and LinkedIn – nay, beyond their league. Not bad for a company who’s struggled with monetization and has not turned in a profit for the better part of a decade, yes?
Here’s a nifty interactive infographic from The New Yorker that will give you an even better idea of just how good things are after the Twitter IPO. The article does play on the side of caution, though, and highlights the fact that while the stock may have surged, “not all signs are good for Twitter”. Additionally, this surge in Twitter IPO stock can also be an indicator of the return of risk tolerance, which is actually not a good thing for professional investors.
Another interesting angle: there has been some speculation about another tech bubble forming due to the overwhelming Twitter IPO. Lance Ulanoff at Mashable says, NO.
Will Twitter continue to rise or crash?
[Image via NYPost]