Twitter shares rocket 92% higher in IPO debut, to a high of US$50

NEW YORK (Reuters) - Twitter Inc stock soared 92 per cent in the first day of trading on Thursday on the New York Stock Exchange as investors snapped up shares in the microblogging site, pushing its market value to a heady US$25 billion (S$31.15 billion).

The shares opened at US$45.10 a share, up from the initial public offering price of US$26 set on Wednesday, then added to those gains, hitting a high of US$50.

Sources said the flotation had drawn strong demand, with investors asking for 30 times the number of shares on offer as they bet on potential growth at the money-losing social media company.

The opening price valued the shares at about 22 times forecast 2014 sales, nearly double that multiple at social media rivals Facebook Inc and LinkedIn Corp.

Twitter executives including chief executive Dick Costolo and founder Jack Dorsey thronged to the floor of the New York Stock Exchange to witness the initial public offering (IPO). The Big Board snatched the offering away from Nasdaq after the normally tech-focused Nasdaq stumbled with the larger Facebook flotation last year.

"Facebook was so overhyped people felt like they couldn't miss out," said Mr Kenneth Polcari, a senior floor official at O'Neil Securities Inc. "Twitter isn't like that, though you can feel the excitement."

British actor Patrick Stewart rang the opening bell at the exchange together with nine-year-old Vivienne Harr, who started a charity to end childhood slavery using the microblogging site.

"I guess I represent the poster boy for Twitter," Stewart said, adding that he had only been tweeting for about a year and wasn't buying Twitter stock today.

Twitter's building staff opened its offices in San Francisco extra early, at 5.30am on Thursday. By 7.30am, hundreds of employees had flocked to their ninth-floor cafeteria to watch Stewart ring the opening bell on TV.

The microblogging network priced its 70 million shares at above the targeted range of US$23 to US$25, which had been raised once before. The IPO values Twitter at US$14.1 billion, with the potential to reach US$14.4 billion if underwriters exercise an overallotment option.

If the full overallotment is exercised, as expected, Twitter could raise US$2.1 billion, making it the second-largest Internet offering in the United States behind Facebook Inc's US$16 billion IPO last year and ahead of Google Inc's 2004 IPO, according to Thomson Reuters data.

Twitter boasts 230 million global users, including heads of state and celebrities, but it lost US$65 million in its most recent quarter and questions remained about long-term prospects.

It also lacks the ubiquity of Facebook or the "stickiness" factor that keeps people checking the No. 1 social network on a daily basis.

A Reuters-Ipsos poll last month showed that 36 per cent of people who signed up for a Twitter account say they do not use it.