Twitter shares up 73% on target for IPO

Twitter’s shares closed on the first day of trading at $44.90, almost 73% higher than the company’s initial target of $26

After a smooth floatation on the New York Stock Exchange, Twitter’s shares peaked at $50.09 before closing at $44.90, almost 73% higher than the company’s initial target of $26.

Twitter’s initial public offering saw none of the problems that beset Facebook’s listing on the Nasdaq in May 2012, with Twitter opting to list on the New York Stock Exchange (NYSE), which conducted unprecedented advance testing.

After the first day of trading, the loss-making microblogging firm is worth just over $31bn, a higher valuation than corporations such as BSkyB, Sainsbury’s and BAE Systems, according to the Telegraph.

The float instantly made billionaires of co-founders Ev Williams and Jack Dorsey. Williams owns 59.6m shares, valued at more than $2.69bn. Dorsey holds another 23.4m shares, valued at over $1bn.

But the biggest winner was private equity group Rizvi Traverse, Twitter's largest shareholder with nearly $4bn worth of the stock, according to the Guardian.

More than 13 million of the 70 million shares up for sale were traded in the first day of the biggest technology listing since Facebook, despite the fact Twitter has yet to make a profit.

The microblogging service made a loss of $69m in the first six months of 2013 despite revenues of $254m, with about 85% of revenues from advertising.

Twitter has not disclosed when it expects to become profitable, but analysts estimate it will not do so until 2015.

With more than 75% of Twitter users accessing the site from their mobile phones, mobile ad growth is seen as key by investors.

Twitter’s recent acquisition of mobile ad sales management firm MoPub is clearly aimed at strengthening its ad sales.

The acquisition will allow Twitter to sell MoPub’s expertise in mobile advertising to other parties and its purchase was seen by analysts as a critical move in growing revenues.

But some analysts fear that increased advertising may make Twitter less appealing to users, while others have questioned whether Twitter's advertising targets are achievable.

Now seven years old, Twitter claims more than 200m users worldwide and has 53m active users in the US, where it makes most of its advertising revenues.

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