initial public offerings (IPOs) trading on American exchanges

Thursday, November 7, 2013

Twitter (TWTR) began trading on the NYSE on 7 November 2013

The newly-minted public shares of Twitter have come to market, opening at $45.10 per share — well ahead of conservative predictions.

  • Largest IPO since Facebook

Twitter sold 70 million shares in its initial public offering, raising $1.8 billion. The opening price was 73% above the public offering price of $26. At a price at or above the opening, the profitless social media darling has a rather astounding market value of somewhere above $31 billion.

Twitter (TWTR) stock didn’t start trading with the rest of the New York Stock Exchange listings at 9:30 a.m. Market makers are busy matching buyers and sellers. Bloomberg intially reported the Twitter bid was $40 and ask, $44.  At around 10:30 a.m.,  NYSE officials said the stock could open “between $45 and $47,” according to the Wall Street Journal.

** click to enlarge **

Evan Williams
Evan Williams
$2.4 billion
Dick Costolo
Dick Costolo
Chief executive
$320 million
Jack Dorsey
Jack Dorsey
Chairman & co-founder
$977 million
Suhail Rizvi and Rizvi Traverse
Suhail Rizvi and Rizvi Traverse
First invested in 2010
$3.5 billion
Peter Fenton and Benchmark Capital
Peter Fenton and Benchmark Capital, First invested in 2009
$1.3 billion
Share value is based on S.E.C. filings and includes restricted stock.

Boston police spokeswoman Cheryl Fiandaca helped to ring the opening bell of the New York Stock Exchange this morning, invited by Twitter, which was launching its much-anticipated IPO, because of her department’s use of Twitter during the Boston Marathon bombings.

Twitter said Fiandaca, actor Patrick Stewart and nine-year-old activist Vivienne Harr, were “very different people,” but had one thing in common: “they use Twitter in amazing ways.”

Twitter said the department’s tweets served as “a lifeline of communication for the entire city, and served as a defense against miscommunication” during the uncertain days after the April 15 bombings, which killed three people and wounded more than 260 others. 

Nov. 8 (Bloomberg) -- Twitter Inc.’s revenue will have to surge about 50-fold during the next decade to justify the stock’s price after one day of trading, according to Aswath Damodaran, a finance professor at New York University who specializes in valuation.

     The microblogging service has to generate sales of about $32 billion in 2023 to be worth $45 a share, Damodaran wrote in a posting yesterday on AOL Inc.’s TechCrunch website. Analysts are looking for revenue of $640.2 million this year, based on the average estimate in a Bloomberg survey.

     The chart above illustrates how much Twitter, whose shares closed yesterday at $44.90, would have to grow to reach his revenue estimate. The annual figures are based on the San Francisco-based company’s prospectus for its initial public offering, the Bloomberg survey of estimates for 2013 and 2014, and projected gains of about 45 percent a year from 2015-2023 that would be needed to achieve the $32 billion target.

     “Twitter is a good company, with the potential to be a great one,” Damodaran, the author of four books on valuation, wrote in the posting. “Based on my views of the company, it is not a good investment.”

 Based on his calculations, Twitter is worth $18 a share. That’s 31 percent less than the company’s IPO price of $26 and 60 percent less than yesterday’s close.
The estimate assumes Twitter will have about $11.5 billion of revenue in 2023 and account for no more than 5.5 percent of the online advertising market, the posting said. For sales to reach $32 billion, the company would need about a 15 percent market share.

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