NEW YORK (CNNMoney) — It’s official. Wall Street #hearts Twitter. Shares of Twitter soared more than 90% in their initial public offering.
Twitter set its final IPO price Wednesday night at $26 a share. When the stock began trading at 10:49 a.m. ET on Thursday on the New York Stock Exchange, the first trade came in at $45.10 a share.
Shares quickly jumped to near $50, a gain of 91%. Trading volume was extremely heavy, with more than 35 million Twitter shares changing hands in the first ten minutes of trading.
At the $26 per share IPO price, Twitter raised about $1.8 billion through the sale of 70 million shares. By comparison, Facebook raised $16 billion in its IPO.
The Twitter offering’s underwriters — including lead banker Goldman Sachs — have the option to buy another 10.5 million shares from Twitter for excess demand.
Twitter isn’t yet profitable: Like several of its fellow newly public Internet companies, Twitter has yet to turn a profit. The company pulled in $317 million in sales in 2012, but ended up reporting a loss of $79.4 million.
For the first nine months of 2013, Twitter’s revenue was $422 million. But losses also increased, to $134 million.
Twitter’s business model revolves around ads. Twitter runs ads for corporate accounts, specific tweets and topics, and the sponsored content is tucked right into users’ feeds.
Search for AT&T on Twitter, and a “promoted tweet” from a rival like Verizon or Sprint may pop up. A “who to follow” box suggests a promoted corporate account like Macy’s in the top slot. Advertisers can also place “trends” — like the name of an album going on sale — in the list of topics that are popular worldwide or in a specific city.
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