Investors are betting there are more profits in tweets.
Shares of Twitter Inc. (NYSE:TWTR) jumped nearly 93% above its initial public offering (IPO) price in the first few minutes of trading on Thursday, November 7.
Twitter shares rose as high as $50.09 per share in the first few minutes of trading following the company’s IPO of 70 million shares at $26 per share. At 9.07 a.m PST, Twitter shares were trading at $45.86.
Investor interest in the micro-blogging service seemed to be strong leading up to its market debut. Twitter’s IPO price was originally between $17 to $20 per share, which was then increased to between $23 and $25 per share on November 4. A day before the IPO, the price was raised to $26 per share.
Investors are betting the company can begin to post a profit over the next few years as it expands its user base and platform partners. According to its prospectus, Twitter plans to add new advertising formats while improving its targeted advertising opportunities and expand opportunities for advertisers outside of the U.S. The company sees a significant opportunity to expand its user base of 232 million active monthly users with a global market of 2.4 billion Internet users and 1.2 billion smartphone users.
Revenues have more than doubled so far this year, rising to US$422.2 million in the nine months ending September 30, from $204.7 million in the same period last year.
But its net loss has also jumped 89% to $133.8 million from $70.7 million.
