Twitter worth £19bn after Wall Street debut

A Twitter storm on Wall Street saw the micro-blogging site add billions of dollars to its value as the company made its market debut

Dominic Lipinski/PA Wire Logo of social networking website Twitter
Logo of social networking website Twitter

A Twitter storm on Wall Street saw the micro-blogging site add billions of dollars to its value as the company made its market debut.

Shares opened at 45.10 US dollars (£28.05) on the New York stock exchange, 73% above its initial offer price of 26 US dollars (£16.17).

It meant that just seven years after starting up, the ubiquitous technology brand was worth 31bn dollars (£19bn), putting it in the range of established companies such as KFC and Pizza Hut owner Yum Brands.

The initial offer price had valued the company at more than 18bn dollars (£11bn) but this had soared by the time of the opening bell on Wall Street – rung by Twitter users including Star Trek actor Sir Patrick Stewart.

Twitter’s public debut is the most highly anticipated since that of Facebook, in May last year. The company has more than 230 million users but is yet to make a profit.

It has priced itself at a mere fraction of Facebook’s initial 104 billion-dollar (£65bn) valuation, in a likely attempt to avoid Facebook’s fate of taking more than a year to surpass its initial public offering price. Twitter is offering 70m shares for sale, along with an option to buy another 10.5m.

Ishaq Siddiqi, market strategist at ETX Capital, said it was a “super-stunning debut”.

But he added: “Although we have seen a staggering entry by Twitter today, unless management can continue to reassure the market that this company’s growth profile looks as phenomenal as they claim, we could see the stock drift lower.

“It’s all about turning those Tweets into dollars now.”

One of the major challenges facing Twitter as a new public company will be to generate more revenue from outside America. While more than 75% of users are outside the US, just 26% of its revenue comes from abroad.

 

 

 

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