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Twitter shares surge more than 74% on first day of trading

Published 11/07/2013, 11:52 AM
Updated 11/07/2013, 11:54 AM
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Investing.com - The wildly popular micro-blogging social network Twitter soared in its first day of trading on Thursday, trading around USD45.24 a share, up 74% above its USD26 per-share IPO price.

The stock trades under the ticker symbol "TWTR" and lists on the New York Stock Exchange.

On Monday, Twitter raised the proposed price range to between USD23 and USD25 a share, up from the earlier range of USD17 to USD20, due to huge investor demand before opening at USD26 on Thursday.

Goldman Sachs acted as the lead underwriter for the IPO, with Morgan Stanley and JPMorgan Chase, while Bank of America Merrill Lynch and Deutsche Bank also participating.

Twitter's IPO was be the largest technology market debut since Facebook went public in May 2012.

According to its IPO prospectus, the seven-year-old Twitter boasts 230 million users and reports around 500 million tweets a day even though the company remains unprofitable. In the first half of 2013 Twitter reported a loss of USD69 million and posted revenues of USD254 million.

Elsewhere, U.S. stocks were lower due to a surprise European Central Bank decision to cut rates as well as surging U.S. gross domestic product figures.

The ECB trimmed its benchmark interest rate to a record-low 0.25% from 0.5% in an unexpected decision.

The bank also cut its marginal lending rate to 0.75% from 1% and left its deposit facility rate unchanged at zero.

ECB President Mario Draghi said euro zone borrowing costs will remain at present or even lower levels until the economy improves, adding that the euro zone may experience "a prolonged period of low inflation."

Meanwhile in the U.S. official data showed that the U.S. economy grew at an annual rate of 2.8% in the three months to September, far surpassing expectations for a 2.0% reading. The U.S. economy grew by 2.5% in the preceding quarter.

The robust data rekindled expectations that the Federal Reserve could announce plans to scale back its USD85 billion-a-month stimulus program as its next monthly meeting in December.

Stimulus programs aim to drive recovery by depressing borrowing costs, boosting stock prices as a side effect.

A decision to begin tapering bond purchases could rattle stock markets temporarily due to the uncertainty over how equities will perform without a monetary crutch.

Investors also avoided stocks in late-morning trading due to uncertainty over the October jobs report due for release on Friday.

Separately, the Department of Labor said the number of individuals filing for initial jobless benefits in the U.S. last week fell by 9,000 to a seasonally adjusted 336,000, largely in line with analysts' forecasts for a claims to fall by 10,000.

Leading Dow Jones Industrial Average performers included DuPont, up 0.70%, IBM, up 0.63%, and Pfizer, up 0.47%.

The Dow Jones Industrial Average's worst performers included Walt Disney, down 1.57%, Microsoft, down 1.27%, and Visa, down 1.01%.








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