FRENZIED buying in Twitter shares grabbed Wall Street’s attention yesterday, as the social media stock surged well above expectations, while major indexes fell, with the S&P 500 suffering its worst daily decline since August.
The broader market was hurt by weak earnings from Whole Foods and Qualcomm. The tech-heavy Nasdaq index recorded its biggest daily decline in a month.
Twitter oared as much as 92 per cent in its first day of trading on the New York Stock Exchange as investors snapped up shares in the popular microblogging site in a frenzy that recalled the days of the dot-com bubble.
The shares opened at $45.10 a share, up from the initial public offering price of $26 set Wednesday, then added to those gains, hitting a high above $50. The stock closed up 73 per cent at $44.90 with 117 million shares traded.
“This crowns Twitter probably as the most expensive IPO on a price-to-sales metric ever,” said Channing Smith, managing director at Capital Advisors in Tulsa, Oklahoma. “With this multiple, you’re leaning on everything going right,” Smith said.
The rest of the market was more downbeat. Qualcomm shares fell 3.8 percent to $67.09, one of the biggest drags on both the S&P 500 and Nasdaq 100, after the company forecast revenue below expectations.
The Dow Jones industrial average was down 152.90 points, or 0.97 per cent, at 15,593.98. The Standard & Poor’s 500 Index was down 23.34 points, or 1.32 per cent, at 1,747.15. The Nasdaq Composite Index was down 74.61 points, or 1.90 per cent, at 3,857.33.