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Twitter hits Wall Street with a bang

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Twitter has hit Wall Street with a bang, as an investor frenzy quickly sent shares surging after the public share offering for the fast-growing social network.

In the first exchanges on Thursday, Twitter vaulted 80.7 per cent to $US47, a day after the initial public offering (IPO) at $US26 per share.

While some analysts cautioned about the fast-changing nature of social media, the debut has led to a stampede for Twitter shares.

The key Twitter founders attended the opening on the New York Stock Exchange, along with Star Trek actor Patrick Stewart and a nine-year-old girl who operates a lemonade stand.

“Honored to join @ev @jack @biz @dickc & the @Twitter team at their historic IPO this morning,” Stewart tweeted, referring to founders Evan Williams, Jack Dorsey, Biz Stone, and Twitter chief executive Dick Costolo.

“We have a lot of work ahead of us” Costolo told CNBC television from the floor of the stock exchange. “All the capital raised by this is going into the company.”

Asked about Twitter’s growth potential, Costolo said, “It’s all about making it very simple and easy for new users to come to the platform … we all have examples of why this service can be useful to everyone on the planet.”

Cantor Fitzgerald analyst Youssef Squali was upbeat on the company, saying in a note to clients that “Twitter is based on a one-to-all, all-the-time broadcast distribution model, and as such, fulfills an unmet need”.

“This model is highly complementary to traditional media outlets (especially TV), and fulfills the need for up-to-the-minute, trending information in real time,” the note said.

“The platform also benefits from positive network effects, with more activity on Twitter resulting in the creation and distribution of more content, which attracts more users, platform partners and advertisers, and so on.”

Twitter offered 70 million shares on the New York Stock Exchange, generating $US1.82 billion ($A1.9 billion), and gave underwriters a 30-day option to purchase an additional 10.5 million shares.

The IPO assigned a market value of around $US14.4 billion to the company whose messaging service has become a hugely popular tool for celebrities, journalists, political leaders and others.

With the over-allotment it should be the second-biggest tech IPO after Facebook’s $US16 billion effort last year and ahead of Google’s 2004 offer, which raised $US1.92 billion, according to research firm Dealogic.

Depending on the outcome of the common stock offer to underwriters, between 12.8 and 14.5 per cent of the company’s shares will be publicly traded. The rest is held by its founders and a handful of early investors.

Twitter has fast become engrained in popular culture but must still convince investors of its business model, having lost more than $440 million since 2010.

But with 232 million users and growing, Twitter is expected to be able to reach profitability by delivering ads in the form of promoted tweets, and from its data analytics.