Still, most analysts do not expect the company to be profitable until 2015. Investors will be watching closely to see whether Twitter was worth the premium price.
Yesterday's stock surge was "really not as important as you might think", said Kevin Landis, a portfolio manager with Firsthand Funds, which owns shares in Twitter. "What really matters is where the stock is going to be in six months, 12 months."
The most eagerly awaited initial public offering of the year was carefully orchestrated to avoid the dysfunction that marked Facebook's IPO.
Trading on the New York Stock Exchange under "TWTR", shares opened at US$45.10, 73 per cent above their initial offering price.
In the first few hours, the stock jumped as high as US$50.09. Most of those gains held throughout the day, with Twitter closing at US$44.90, despite a broader market decline.
The narrow price range indicated that people felt it was "pretty fairly priced", said J.J. Kinahan, chief strategist at TD Ameritrade.
The price spike "clearly shows that demand exceeds the supply of shares", said Wedbush analyst Michael Pachter.
Twitter raised US$1.8 billion on Thursday when it sold 70 million shares to select investors for US$26 each. But the huge first-day pop left some analysts wondering whether the company could have raised more. Had Twitter priced the stock at US$30, for instance, the company would have taken away $2.1 billion. At US$35, it would have reaped nearly US$2.5 billion. That's a lot for a company that has never made a profit and had revenue of just US$317 million last year.
If the price stays this high, or goes even higher, shareholders will no doubt be happy. But the money that they might make from any stock sale does not go to the company.
Named after the sound of a chirping bird, Twitter had its origins in 2005, when creators Noah Glass and Evan Williams were trying to get people to sign up for Odeo, a podcasting service they created. Odeo didn't make it.
By early 2006, Glass and fellow Odeo programmer Jack Dorsey began work on a new project: teaming with co-worker Christopher "Biz" Stone on a way to corral text messages typically sent over a phone.
It was Glass who came up with the original name Twttr. The two vowels were added later. The first tweets were sent on March 21, 2006.
By 2007, Twitter was incorporated with Dorsey as the original chief executive and Williams as chairman. Dorsey and Williams would eventually swap roles. Both are major shareholders, though neither runs the firm.
Since those early days, the site has attracted world leaders, religious figures and celebrities, plus chief executives, businesses and countless marketers and self-promoters.
At its IPO price, Twitter was valued at roughly 28 times its projected 2013 revenue of US$650 million, based on its current growth rate. Facebook trades at about 16 times its projected 2013 revenue, according to analyst forecasts from FactSet. Google is trading at about seven times its net revenue, the figure Wall St follows that excludes ad commissions.
Research firm Outsell puts Twitter's fundamental value at about half of the IPO price, says analyst Ken Doctor. That figure is based on factors such as revenue and revenue growth.
"That's not unusual," Doctor said. "You are betting on a big future."
- AP
