Twitter makes big splash in Wall Street debut


The San Francisco-based company made a big splash on its opening day on Wall Street debut and made instant millionaires out of dozens of Bay Area employees.

Twitter executives didn't make the same mistakes as Facebook did a year and a half ago. They priced their stock conservatively and didn't flood the market with too many shares.

Twitter stock closed Thursday afternoon at just under $45 a share, a 72 percent premium from its IPO price of $26.

You know a lot's going on because we haven't seen many people leave the Twitter offices since lunch time. We also heard from a neighbor across the street telling us he can see into the building. He says there are preparations underway for a big bash.

This was one day Twitter employees probably wanted to be at the office early. While the doors were closed to us, we got an inside look at IPO day from the tweets and photos posted by employees.

This is the mound of doughnuts that awaited them, supercharging them with sugar on top of the adrenaline rush of the opening bell in New York. They scrunched together to watch the ceremony on TV monitors.

One thing was clear early on -- the $26 per share IPO price set Wednesday night was conservative. Underwriters trying to gauge supply and demand settled on a $45 opening price, 73 percent higher. That meant Twitter could have raised over $1.5 billion more.

Jeremy Stoppelman, the CEO of Yelp, says setting an IPO price isn't easy.

"It's not a science, it's simply an art," Stoppelman said. "You sit in that room at the end of a long day and a long couple of weeks, and you do your best to deliver value both to your own existing shareholders and the new ones. And you try to be as fair as possible."

While institutional investors were jumped in, certified financial planner Milo Benningfield didn't see a similar appetite among smaller, individual investors because of certain risk factors.

"Any IPO stock becomes a trading vehicle in the first few days after the IPO, and it's a guessing game about how much money the company will be eventually worth," Benningfield said. "Nobody knows. It just doesn't have a track record. There may be some revenues, but we don't know what the profitability is going to be. There's just a host of unknowns."

Analysts say Twitter played it conservative, acknowledging its weak spots while project confidence about its future.

"They were very cautious," ABC News technology editor Joanna Stern said. "They took a very meticulous approach to approaching this IPO day, and they've been talking very candidly about their growth. They've been talking about their slower growth. They've been talking about how many really engaged users they have."

Whether you watch from the sidelines, or put your cash on the line, Twitter is having a good day.

"We're watching a star be born, that's always exciting," Benningfield said.

Twitter now has about $2 billion to expand the company. And investors who put in their money Thursday will be waiting for the day when Twitter turns a profit.

Copyright © 2023 KGO-TV. All Rights Reserved.