Twitter’s IPO has been a massive success, opening at $45.10 on the NYSE yesterday which was a 73% higher than the $26 IPO set by Twitter on Wednesday. Thankfully avoiding the troubles that plagued Facebook’s debut last year and delivering the kind of “pop” that investors in initial public offerings covet. The excitement quickly petered out. Shares spent much of the day hovering around $46 before closing below the opening price, at $44.90.
“They wanted this deal to work. They didn’t want it to be in the penalty box like Facebook was for six months,” said Christopher Baggini, senior portfolio manager at Turner Investments, a Berwyn, Pa., firm managing about $9 billion in assets that bought shares at the IPO price.
The San Francisco-based company raised as much as $2.1 billion and ended the day with a market capitalization of about $25 billion.The share price rise made Chairman Jack Dorsey a billionaire on paper. Chief Executive Dick Costolo’s stake was worth $345 million by day’s end. Twitter has distributed nearly 86 million restricted stock units to its 2,300 employees. At Thursday’s closing price, those units have a total value of $3.86 billion, or an average of $1.68 million per employee.But the stock isn’t divided evenly among employees. And they must hold the stock for at least one year before they can sell even one-quarter of it. The stock issued this year—more than half the total—can’t be sold until August 2014.
For Twitter’s employees, the IPO marks a turning point even if some of them can’t tap their newfound paper wealth anytime soon.
Source: The Wall Street Journal
