Live Blogging the Twitter IPO

Source: courtesy of Twitter

Twitter shares have closed up 72% at $44.90 as of 4:00 p.m. EST. We also saw 117 million shares trade hands without counting the after-hours trading session shares. The closing first day’s full trading range was $44.00 to $50.09. We would treat this first analyst downgrade as a one-off at this point until more analyst calls are seen, but we would also point out that one trader who was awarded shares at the IPO price told us that some hedge funds and trading firms are already looking for ways to borrow the stock. In short, they are looking on how to short sell Twitter.

November 7 | 2:56 – Heading into the close

With about an hour to go before U.S. markets close, it looks like the IG Markets prediction that Twitter shares would close at $48 is really on the money.

November 7 | 2:44 – Twitter among giants

The AP also points out that Twitter’s market value of about $33 billion puts it in the same league as media giants CBS Corp. (NYSE: CBS) at more than $34 billion, Discovery Communications Inc. (NASDAQ: DISCA) near $30 billion and Viacom Inc. (NYSE: VIAB) at almost $39 billion, but short of Time Warner Inc. (NYSE: TWX) at about $60 billion and Walt Disney Co. (NYSE: DIS) near $120 billion.

November 7 | 1:40 – Inventors lose out

ABC News talked to two people today who invented features of Twitter that we now take for granted. One is the #hashtag group symbol and the other is the @username form of addressing a particular Twitterer. Neither guy ever worked for the company and neither made a buck from today’s IPO.

November 7 | 1:32 – Twitter quitters

The Associated Press ponders the risk of Twitter burnout. Can the company grow its user base and revenues as promised when so many, including celebrities such as Alec Baldwin and Miley Cyrus, close their accounts in order to move on with their lives?

Shares are trading at around $45.97. Still on their way to $48 close?

November 7 | 12:54 – The Twitter owners

Twitter shares remain north of $45 despite that analyst downgrade from boutique firm Pivotal Research. Trading volume has started to level off to something resembling normal after a hot IPO. As of 12:54 p.m. EST, we have seen more than 82 million shares trade hands, and the last print was $45.91. The real drop has been seen in “the Twitter owners,” as GSV Capital Corp. (NASDAQ: GSVC) is now down just over 10% at $13.85, and Firsthand Technology Value Fund (NASDAQ: SVVC) is down 6.3% at $22.28.

November 7 | 12:50 – Above average

The S&P 500 index is up nearly 25% so far in 2013. The average share price jump for all companies that have gone public so far in 2013 is about 50%. Like all the children in Lake Woebegon, Twitter’s share price gain today is above average.

November 7 | 12:30 – New billionaires

Twitter’s founders are now billionaires, USA Today reminds us. Evan Williams’s stock should be worth around $2.7 billion, while Jack Dorsey’s stake should be worth near $1.2 billion. Also, CEO Dick Costolo’s stock should be in the vicinity of $368 million.

November 7 | 11:58 – Business as usual

It is “business as usual” at Twitter headquarters in San Francisco, according to ABC News. Employees are pleased but not reveling in the apparently successful IPO. They know there is much work ahead of them.

November 7 | 11:50 – Downgrade!

Bloomberg TV has just hosted Brian Weiser of Pivotal Research for news of an analyst downgrade on Twitter. Twitter was given a $30 price target in this call. Weiser was on a telephone interview with the Bloomberg team and said that the relative valuation to other media and Internet stocks is the reason he downgraded it. The report was said to be published minutes ago.

November 7 | 11:45 – A dangerous investment?

Research firm Sageworks analyzes privately held companies, and the firm’s chairman says that Twitter is “a dangerous long term investment.” A valuation at more than $14 billion “is simply far too high for a company that’s losing money and seeing their rate of sales growth decrease.” Wish he would tell us how he really feels.

November 7 | 11:35 – No trading issues?

NYSE’s CEO was on Bloomberg TV briefly around the time Twitter shares were backing off. Bloomberg asked about trading systems, and Duncan Niederauer said he had not heard about any trading issues. Bloomberg TV also said that they have not heard from underwriters about any overallotment shares being exercised. With gains like this, it seems a safe bet to consider that the extra 10 million shares or so were exercised. At 11:35, we have seen more than 65 million shares trade hands, the last price was $45.47, and the post-IPO range has been $44.00 to $50.09.

November 7 | 11:05 – Breaks above $50

Trading in Twitter managed to break above $50 momentarily. After a $45.10 official opening price, we have a post IPO range so far of $44.99 to $50.09. The current share price is $447.80 or so, and we have seen 43 million shares trade hands. Again, most of the 70 million shares were sent to institutions, and they are buy-and-hold shops in many cases. An 84% gain may change who actually holds, but the real free float that makes up this volume is smaller than you might think.

November 7 | 11:00 – Who makes out?

Who makes out better — Twitter or its bankers/brokers? At a $26 price, big investors have already earned an 80% premium. Twitter left a pile of money on the table. Whatever you think about the mechanics of the Facebook IPO, the company got all the money.

November 7 | 10:55 – Big opening

The opening price indications implications are massive. The $45.10 price gives it a $32 billion market cap and well over 50-times sales. Twitter still loses money. Facebook trades at about 15 times expected sales and about 58-times expected earnings (2013 estimates).

November 7 | 10:50 – $45.10 open

We are getting trade indications of an opening price of $45.10 on the NYSE now. We have seen 15 million shares hit, and the last trade was $45.80.

November 7 | 10:48 – Headwinds?

Watch headwinds from broader market as a possible reality check. If this continues, it could harm the people making “Market Price Buy on Open” orders. Facebook opened up, ticked slightly higher and began a long march south. S&P 500 -8, DJIA -35, Nasdaq -45

November 7 | 10:45 – Closing price prediction

The London gray market firm IG Markets had predicted a closing price for Twitter’s IPO today of around $48. Looks like the shares might open close to that level.

November 7 | 10:42 – Looking for equilibrium

Current indications are now $45.50 to $46.50 as the market tries to find equilibrium. We are still expecting an open before the end of the hour. The lack of retail and fast-hand trader shares will be something to keep in mind. Again, the 10 million shares or so in the overallotment option are a shoo-in to be exercised.

November 7 | 10:36 – Twitter TV

Twitter’s CEO tells Bloomberg that growth will come from TV integration and better onboarding.

November 7 | 10:33 – Still waiting

 We are still awaiting an opening price for Twitter. The NYSE indicated that the first trades would be after 10:00, and we expected it to open sometime shortly before 10:30, as the dust settled and as price orders were getting narrower. Bloomberg TV just said that it now expects the open to come right before the end of the hour (11:00) now. What we are seeing is an obvious move by the NYSE to make sure that the trading snafu of Facebook is not duplicated on Twitter’s debut.

November 7 | 10:20 – Up to $47

At 10:20 a.m. we are seeing that the broad tape indications are now looking like $43 to $47 per share. That is not unusual, to see a smoking hot IPO go way up and then come back down. This is still what we would refer to as price discovery by traders. Again, the institutional allocations were very high on the IPO, so the real free-trading float will be far smaller than what the volume indicates.

November 7 | 10:05 – Up to $45

 Trading indications are now $44 to $45. We would expect the NYSE to release trading here in the next 10 to 20 minutes.

November 7 | 10:00 – Who has shares

Both Firsthand Technology Value Fund (NASDAQ: SVVC) and GSV Capital Corp. (NASDAQ: GSVC) have holdings of Twitter shares. You are already seeing a “sell the news” in those shares: GSVC -2.5% at $15.05; SVVC -1.35 at $23.48

November 7 | 9:57 – Up to $46

Trading indications on the broad tape were $40 to $44 initially but are now $42 to $46. Expect all of the overallotment shares to be exercised.

November 7 | 9:55 – In other news

Decent economic news today on fewer new jobless claims, coupled with a 2.8% GDP growth rate add a bit of fuel to the fire over Twitter’s IPO. Even the European Central Bank joined the party, cutting its key interest to 0.25%. All those easy euros can now chase Twitter stock.

November 7 | 9:46 – Congress must wait

 If you’re a member of Congress or a senior staffer, you can’t buy shares until they become widely traded and available. The Stop Trading on Congressional Knowledge Act (STOCK) passed in April 2012 prohibits such behavior. In this case, it might be for your own good.

November 7 | 9:45 – First indications

We just saw the first formal trading indications at $40 to $44… we were just about to update that indications were up to $40 but on a smaller number of shares than the 10 million shares at $35.

November 7 | 9:41 – How many shares?

Bloomberg TV reported that there are 10 million shares to buy at $35 per share. We heard a slightly lower figure 10 minutes ago (8 million shares), but this is called price discovery.

November 7 | 9:40 – Is it too late?

If you aren’t already in line for your fair share of Twitter stock, it might not be too late. Call your broker. If you have a long-standing relationship with the same firm, you might be able to beg successfully. If you use an online brokerage, call now and ask. All the firm can say is, “No chance.” Or wait until shares start trading and then place your order. Good luck, and be careful, it’s a jungle out there.

November 7 | 9:35 – Only 20 million?

Twitter’s order flow was not just strong. We are hearing 30-times oversubscribed. The very first indications we have been told from a trader who was awarded shares at the offering is that 50 million shares of the 70 million went to buy and hold institutions. That leaves 20 million, plus the overallotment shares for the real free float.

November 7 | 9:27 – Twitter before the bell

Twitter Inc. (NYSE: TWTR) has managed to price its social media initial public offering of 70 million at $26 per share, above an already raised price range. We are giving live coverage of the event throughout the trading day. This live coverage, or live blogging, will have many updates.

The first thing we would point out here is that we have four positive analyst calls on Twitter even before the stock has opened. We also provided five angles of the IPO that include overlaps with Facebook Inc. (NASDAQ: FB) and LinkedIn Corp. (NYSE: LNKD) in social media. Both stocks have done well now despite entirely different IPO reactions. Twitter’s IPO may be more. One take this morning, which has been shared by others as well, is that many investors will want to lock in their post-IPO gains immediately if they get awarded shares.

Another issue is that the NYSE CEO told CNBC that the exchange has done everything it could to prepare for the IPO trading. They did not say they wanted to avoid the Facebook Inc. (NASDAQ: FB) debacle, but that is the deal.

November 7 | 9:25 – So it begins

The NYSE has said this morning that it expects an orderly process, but it also said that the trading of Twitter will not open in the first few minutes of trading like other IPOs recently have. This should open shortly after 10:00 a.m., but we would interpret the time as “after 10, with updates” based on history.