Tweet success in sight as stock up 8.4pc
SHARES in Twitter had their best day on the markets since the company's stock market flotation after improvements to its advertising products sparked optimism that the social-networking company will eventually make a profit, and grow into its huge market valuation.
Twitter stock rose 8.4pc to $48.74 (€35.5) a share at 1:02pm in New York, the biggest jump since the day after the company's initial public offering (IPO) on November 6.
With a market capitalisation of more than $27bn, the microblogging service is among the most expensive internet stocks -- based on a promise of future growth.
Yesterday's big hike in share price comes as the company adds features that will help advertisers better reach more than 230 million users who log on to Twitter.
Last week, Twitter expanded a tool that lets marketers reach users who have already expressed interest in products -- the tool works by analysing Twitter users' web-browsing histories.
Its the kind of offering that helps to justify the stock's price, said Brian Nowak, an analyst at Susquehanna Financial Group.
"We're seeing that there's a lot they can do with targeting and retargeting for advertisers," Mr Nowak said in an interview.
Twitter, based in San Francisco, isn't predicted to make a profit until 2016, based on the average estimate of analysts surveyed by Bloomberg.
The stock now trades at more than 24 times its projected revenue for 2014.