Twitter falls 7% after opening day bonanza

Nov 08, 2013
A banner with the Twitter logo is set on the front of the New York Stock Exchange on November 7, 2013 in New York

Twitter shares retreated Friday a day after a sizzling debut on Wall Street, as some of the frenzy about the popular messaging service faded.

The stock slipped 7.26 percent to close at $41.64—a day after a stunning gain of 72.69 percent on its first day of trading on the New York Stock Exchange after a $1.8 billion .

Jon Ogg at 24/7 Wall Street said Friday's sentiment was "a bit like an IPO hangover."

"Keep in mind that Twitter is valued at more than 50 times sales now, something almost unheard of over the past decade," Ogg said.

Some analysts said the debut was helped in part by a shortage of Twitter stock, and that most of the 70 million shares were reserved by the underwriters.

Brian Wieser at Pivotal Research, who downgraded the stock after the opening surge, noted Friday that "our very positive view on the company hasn't changed" but that the valuation seems too high to justify its price.

"Our view was positive going into the process. Twitter went through around its IPO and came out more favorably in most ways by the time the stock started trading. Our call on the stock is simply a matter of how much Twitter is worth given the scale we assume the company will realize over time."

Daniel Ernst at Hudson Square Research issued a "sell" recommendation, saying that Twitter is "more than fully valued" and priced at 600 times its projected earnings before depreciation and other charges.

Twitter's market capitalization, based on its price, fell back to around $22.6 billion after topping $24 billion on Thursday.

Explore further: Tweeter changes stock symbol after Twitter mix-up

add to favorites email to friend print save as pdf

Related Stories

Twitter sets IPO price at $26, will raise $1.8B

Nov 07, 2013

Twitter has set a price of $26 per share for its initial public offering, which means the company's stock can begin trading Thursday on the New York Stock Exchange in the most highly anticipated IPO since ...

A look at recent tech sector IPOs

Nov 04, 2013

Here is a look at notable tech companies that have conducted initial public offerings over the past two years ahead of Twitter's IPO:

Recommended for you

Report: China to declare Qualcomm a monopoly

6 hours ago

(AP)—Chinese regulators have concluded Qualcomm Inc., one of the biggest makers of chips used in mobile devices, has a monopoly, a government newspaper reported Friday.

Nokia profits rise after sale of handset division

Jul 24, 2014

(AP)—Telecommunications and wireless equipment maker Nokia Corp. saw its shares surge on Thursday after it reported higher profits and an improved earnings outlook in the wake of its sale to Microsoft of its troubled handset ...

User comments : 0