Published November 08. 2013 4:00AM
New York - Shares of Twitter went on sale to the public for the first time Thursday, instantly leaping more than 70 percent above their offering price in a dazzling debut that exceeded even Wall Street's lofty hopes.
By the closing bell, the social network that reinvented global communication in 140-character bursts was valued at $31 billion - nearly as much as Yahoo Inc., an Internet icon from another era, and just below Kraft Foods, the grocery conglomerate founded more than a century ago.
Twitter, which has never turned a profit in the seven years since it was founded, worked hard to temper expectations ahead of the IPO, but all that was swiftly forgotten with the stock's opening surge.
The most anticipated initial public offering of the year was carefully orchestrated to avoid the glitches and eventual letdown that surrounded Facebook's first appearance on the Nasdaq 18 months ago.
Trading on the New York Stock Exchange under the symbol "TWTR," shares opened at $45.10, 73 percent above their initial offering price.
In the first few hours, the stock jumped as high as $50.09. Most of those gains held throughout the day, with Twitter closing at 44.90, despite a broader market decline.
The narrow price range indicated that people felt it was "pretty fairly priced," said JJ Kinahan, chief strategist at TD Ameritrade.
The immediate price spike "clearly shows that demand exceeds the supply of shares," said Wedbush analyst Michael Pachter.
Twitter raised $1.8 billion Wednesday night when it sold 70 million shares to select investors for $26 each. Had it priced the stock at $30, for instance, the company would have taken away $2.1 billion. At $35, it would have reaped nearly $2.5 billion.
"In hindsight, when you look at this, you almost think they left a little too much money on the table," Entner said.
Named after the sound of a chirping bird, Twitter's origins date back to 2005, when creators Noah Glass and Evan Williams were trying to get people to sign up for Odeo, a podcasting service they created. Odeo didn't make it.
By early 2006, Glass and fellow Odeo programmer Jack Dorsey began work on a new project: teaming with co-worker Christopher "Biz" Stone on a way to corral text messages typically sent over a phone.
The company tried to avoid the trouble that plagued Facebook's high-profile debut, which was marred by technical glitches. As a result, the Securities and Exchange Commission fined Nasdaq $10 million, the largest ever levied against an exchange.
The clumsy debut had lasting consequences for Facebook, which closed just 23 cents above its $38 IPO price on that first day and later fell much lower. The stock needed more than a year to climb back above $38.