Twitter Flies High Following IPO Launch - Nearing $50 per Share

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Perhaps to no one's real surprise, Twitter opened up its IPO today at $45 in its first official trade. This was $19 above the initial price of $26 per share set by Twitter. As we check in again at 11 a.m., this morning the stock - TWTR - is now flying high and remains at roughly 80 percent above the opening price of $26 per share, currently fluctuating between the opening initial trade price of $45 and $48.

That first trade values Twitter at just over $25 billion dollars. Is it a surprising leap? Hardly. The word on the street all week has been that Wall Street was gearing up with a great deal of enthusiasm, which led Twitter to up its opening price from $17 to $26.

As anticipated as well, there was a huge run up in demand to get on the IPO from every conceivable quarter of the investment community. Of course, the ones all sitting pretty at the moment are the original investors. Back when we took a look at what these investors were likely to be worth we weren't being conservative - we priced Twitter at $29 per share for our estimates. That said, the $45 opening price certainly makes $29 conservative!

Let's revisit what today's TWTR price means at $46.50 (keeping in mind the price will be fluid all day):

  • Evan Williams: 56,909,847 shares (12 percent), estimated value - $2.65 billion
  • Peter Fenton: 31,568,740 shares (6.7 percent), estimated value - $1.47 billion
  • Jack Dorsey: 23,411,350 shares (4.9 percent), estimated value - $1.09 billion
  • Richard Costolo: 7,589,608 shares (1.6 percent), estimated value - $353 million

The following companies all have approximately 24 million shares each - meaning that their stakes, priced at $46.50 are now worth $1.12 billion .

  • Benchmark Capital Partners
  • Entities affiliated with Rizvi Traverse
  • Entities affiliated with Spark Capital
  • Entities affiliated with Union Square Ventures
  • Entities affiliated with DST Global

Of course these are all paper profits, and once the irrational exuberance wears off, the stock will likely take a dip. That remains to be seen of course, and we will revisit, but for now we can count up a number of newly minted individual billionaires and some very happy early investment firms.

Unlike Facebook's IPO, Twitter has left a lot of potential dollars on the table - well over $1 billion if we consider that perhaps the company should have priced itself at. let's say, $40. Isn't that what they pay all those hundreds of millions of dollars in fees to investment bankers for?

Will TWTR settle in or fall back? It will be interesting to see where the stock closes on Friday. It is worth noting that in the several hours since it opened at $45 the stock hasn't really done anything else, ranging as it has between $48 and $45 (after briefly breaking $50 for a few seconds). We'll point out as well that should the stock dip below $45 whoever made that first trade (unless they sold it at a higher price already) would be in the red. We'll check back at the end of the day and provide an update - stay tuned.

For now however, the champagne can certainly be poured.




Edited by Stefania Viscusi
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TechZone360 Senior Editor

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