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Twitter shares surge in debut as investors stampede to IPO

Twitter shares made their trading debut Thursday, opening at $45.10, up 73 percent from their IPO price of $26.
Twitter shares made their trading debut Thursday, opening at $45.10, up 73 percent from their IPO price of $26. LUCAS JACKSON

Twitter began trading Thursday with a tweet and a bang.

The social network giant debuted on the NYSE — with bids surging above its initial price — in 2013's most eagerly anticipated initial public offering and the most hyped stock sale since rival Facebook went public more than a year ago.

 The IPO has also minted several new millionaires, and at least two new billionaires -- Twitter co-founders Evan Williams and Jack Dorsey.

Although some market analysts have expressed caution about Twitter's IPO, investors stampeded to the offering. The stock, traded on the New York Stock Exchange, was met with heavy demand that pushed its opening price to $45.10, a more than 70-percent surge above its pricing Wednesday night at $26 and valuing the company at $31.6 billion.

It closed the day's trading at $44.90, which was a more than 72-percent jump on the IPO price. It slipped to $44.25 in after-hours trading.

Given the well-chronicled problems that beset Facebook's IPO, Twitter's offering was being closely scrutinized for any potential hiccups. In 2012, Facebook's IPO was badly fumbled by the Nasdaq stock market, with the IPO's afterglow marred by a blizzard of lawsuits, regulatory actions and trading losses for those involved.

So far, however, it has been smooth sailing for the stock's debut on the NYSE.

"Facebook was so over-hyped people felt like they couldn't miss out," said Kenneth Polcari, a senior floor official at O'Neil Securities Inc. "Twitter isn't like that, though you can feel the excitement." 

Still-fledgling Twitter is running large losses, making some observers wonder about its ability to generate profits in a fickle economy. Earlier, Twitter CEO Dick Costolo told CNBC's Julia Boorstin that investors should not be concerned about the company's lack of profits now. He said that it was part of the company's plan to invest for the long term, including plugging money into improving its platform, its ads and growth.

Goldman Sachs is serving as the lead underwriter for the Twitter IPO, alongside Morgan Stanley and JPMorgan Chase.

The company was issuing 70 million shares trading under the symbol "TWTR" on the NYSE.

The social network company, which has never turned a profit in its seven years in existence, had originally set a price range of $17 to $20 per share for the IPO.

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The first trade did not come until 80 minutes after the exchange opened for business when three Twitter users rang the opening bell, including Star Trek actor Sir Patrick Stewart, who had a worldwide following for tweets chronicling his everyday life.

"I guess I represent the poster boy for Twitter," Stewart said, adding that he had only been tweeting for about a year and wasn't buying Twitter stock today.

Also ringing the bell were 9-year-old Vivienne Harr, who started a charity to end childhood slavery using the microblogging site, and Cheryl Fiandaca, head of the Boston Police public affairs office, who tweeted security updates during the Boston Marathon bombing in April.

Twitter's co-founder and chairman, Jack Dorsey, tweeted a brief Vine video to mark the occasion. Twitter bought Vine last year.

(Reuters contributed to this report)

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