Twitter’s stock market debut raised a massive $1.82bn for the company, putting its overall value at $24bn – not bad at all for a seven-year-old firm still making a loss.
CBR has rounded up the experts’ opinions on the IPO, and what it means for the future of the social networking site.
Nathan Vardi, writer at Forbes
"It’s tiny. Facebook increased the size of its IPO in the days leading up to it and raised $16bn. But while Twitter increased the price of the IPO as demand rose, it did not upsize it.
"Twitter will keep all the money raised in its IPO and use it for general corporate purposes, capital expenditures, or save it for a rainy day. On the other hand, more than half the money raised in Facebook’s IPO went into the pockets of early shareholders of the company, like venture capitalists and hedge funds.
"Still, Twitter is going public at an earlier stage in its growth curve, which might make it easier for Twitter to meet high investor expectations."
Peter Garnry, head of equity strategy at Saxo Bank
"Twitter’s IPO shows the sublime and ridiculous nature of our capital markets. Sublime because the IPO went smoothly in terms of trading, but also because it shows how the capitalist system allocates capital to growth companies. But the IPO is also ridiculous because these tech IPOs have become like a video game cheered by ordinary people and the media.
"The valuation at these price levels is disconnected from any logical calculation and reflects a huge downside risk for investors if Twitter does not meet expectations at every quarterly earnings release from now on. For Twitter it is the end of a long journey towards the public market. For investors this is the beginning of a nerve wracking journey of whether Twitter can deliver on the huge expectations."
Brenda Kelly, technical analyst at IG
"This is the largest Silicon Valley IPO since Facebook and underwriters of the flotation will be keen to make this more of a success in comparison. The good news is that extensive hype in advance of the Facebook IPO – blamed to an extent for its less-than-impressive debut on the stock market – has been avoided. The decision to list on the NYSE was also clearly inspired by the disastrous delay in Facebook trading, due to a glitch in the NASDAQ computer.
"It must be remembered that Facebook was, and is, a much bigger company — it had 900 million users when it went public, and has more than a billion today — and its size was one of its big selling points.
"Also unlike Facebook, Twitter has yet to turn a profit. The company reported a net loss of $79.4 million on revenue of only $316.9 million in 2012. Given its active user base the company does have great profit-making potential, but monetising this potential is a different story – something that early investors in Facebook learned the hard way."
Brian Wieser, analyst at Pivotal Research
"With a price that pushes into the high 30s and beyond, Twitter is simply too expensive.
"One way to justify a $45 price in our model would involve presuming that Twitter could generate more than $6bn in annual revenue by 2018. However, we think that would seem overly optimistic."
Tristan Rogers, CEO of ConcretePlatform, a collaboration software provider
"The promoted tweet and advertising revenue that Twitter will be relying on to support its share price will be largely based on the Twitter populous feeling the need to continue with its pointless babble. Clearly, investors already believe this new social fabric a very powerful thing, judging by the interest Facebook’s IPO generated.
"With Twitter yet to turn a profit (as was the case with Facebook pre IPO), we are about to watch another fascinating judgement call for investors. The internet is a big place, and the choice of communication channels and mediums continues to grow. How attached in future hundreds of millions of users will be to their 140 character meanderings is the billion dollar question."