Twitter IPO blows through expectations on first day as stock almost doubles

Twitter raised the bar for social networks with an initial public offering Thursday that far exceeded projections.

The popular microblogging site’s stock nearly doubled in value on its first day of trading, closing at $44.90, up 72 percent from the company’s IPO price of $26.

During the day, Twitter’s stock price even briefly passed that of social-media rival Facebook, which closed down more than 3 percent at $47.56.

Twitter nearly doubled its own market value to $31 billion, brushing aside concerns of another Wall Street social-media flop like Facebook’s disappointing debut in 2012.

Twitter handled their IPO a lot better than Facebook did,” said Jeff Kagan, an Atlanta-based technology analyst. “At the time, it looked like Facebook was a teenager operation, compared to Twitter, which was a typical, mature, well-run IPO.”

But Twitter’s early success comes with its own questions. Namely, investors are wondering how the 7-year-old company will turn a profit, something it has yet to do.

“With or without profit, the stock price is going to go up in the near future,” Mr. Kagan said.

In the third quarter, Twitter reported a loss of $64.6 million, the biggest loss in company history.

But there are positive signs. Twitter reported revenue more than doubled from the same period last year to $168.6 million.

The number of monthly active users on Twitter also rose to 231.7 million, up 6 percent from the previous quarter — though Twitter remains roughly a fourth the size of Facebook, which has more than 1 billion users.

Facebook’s overall valuation, $115 billion, also dwarf’s Twitter.

Twitter does seem to be doing better on the mobile front than Facebook, which is important to investors who believe that is where the future of social networks is headed.

Internationally, Twitter is gaining popularity, but it has thus far been unable to sell enough online advertisements to businesses overseas.

“The only company that is really hitting a home run with online advertising is Google,” Mr. Kagan said.

Investors are banking on the company’s potential rather than its balance sheet, but now that Twitter is on Wall Street, the social network will face increased pressure to turn a profit.

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