Twitter (TWTR) IPO Shares Hang Around Top Price of $46

Shares of social media site nearly double following first day on the New York Stock Exchange.
8:58 | 11/07/13

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Transcript for Twitter (TWTR) IPO Shares Hang Around Top Price of $46
This is a special group. Hello I'm -- Hernandez in New York with an ABC news digital special report Wall Street has been buzzing away for weeks. -- -- twitters IPO debut so let's bring -- ABC news Susan Solomon has been all over the story now that the Twitter. It debut has been may -- what's going -- Hello -- well it's been an exciting day for Twitter on the floor of the New York Stock Exchange. The phone signature shorthand past -- Twitter made its debut on the New York Stock Exchange this morning. With an initial price set at 26 dollars per share trading under the ticker symbol TW TR. The popular social network that lets users send 140 character messages called tweets. Once valued at more than eighteen billion dollars. Early excitement. Drove the share price up even higher in initial trading. Twitter has carefully managed its initial public offering with Twitter executives hoping to avoid the technical glitches that plagued Internet rival Facebook's public launch. Eighteen months ago. Facebook's stock price remain disappointingly flat for more than a year before finally climbing. They don't want to be -- -- FaceBook 2.0 they know how the movie and -- there are so. I they've done a couple things differently they've been very safety played it safe in itself worked pretty well -- Told investors about all the risks they have -- on the New York Stock Exchange and maybe most important of all there's no CEO and a -- Running the play. Twitter is seven years old but hasn't turned a profit in any of that time. Its revenue was growing an analyst take that as a promising sign. A lot of people are gonna please a such a high price tag can investors. I expect in a lot of -- time and I think that they have the big question is is what appetizers and committed to how to it's gonna change the experience the -- but I think we'd be confident they'll have a lot of money to make you -- ride. Cultured expectations Twitter opened well above -- set price going for 45 dollars and ten cents. Five all right thank you is insulting it is the most highly anticipated stock of the year as he's instead it started. At the price of 26 dollars a share analysts expected the seventy million shares to raise one point eight billion for the social media site but of course now the stock is exploding let's see how high and now we're gonna. Take a look at its trading right now it looks at -- it's trading at almost. 46 dollars a share -- Springsteen protest banner Baier -- TG and a research consulting firm that provides real time market research to broker dealers. -- son hedge funds Steve -- is soaring on its debut why. What I and -- I will tell yes it's soaring no one on Wall Street needs any coffee today because there is quite a lot going on I think there's good news and bad -- on Twitter. The good news is this is an incredible company and let's face it it has become. The hub of national and even international. Conversation. Particularly surrounding events things like the Super Bowl presidential debates tragedies news events that happened so. And this company is particularly well suited for mobile which is really I think with a future -- but that's the good news and it's an incredible company one that I use all day every day. The bad news I do think that there are some signs that this could be a a hash tag bubble. And not even just in Twitter but in the market as a whole when we see this kind of a frenzy. When investors are just clamoring to get into a stock at any price the past it's been very dangerous and specifically. I would add. Folks are more more borrowing money to buy stocks we reached levels of debt to buy stocks. That are that are very similar to levels we last saw in 20072008. So let's be careful before we get too excited even though this is a great company. -- investors are being particularly aggressive given the fact that you know this is the -- it's exciting to get in at what's your hope is. The starting price but that's not necessarily sell. That's right and look -- it's an important point that I think as successful -- company already has been it has yet to make money. So while I think long term Twitter is going to be a very good investment. Buying Twitter at 45 dollars right now is somewhat akin to let's say your son is an excellent high school quarterback it would be like buying a mansion for him now on the prospect he's -- to be a first round draft pick now he may be. But there's a lot they can happen between now and and that's kind of -- Twitter is to value the company at 25 billion dollars -- trading -- -- -- Approximately to evaluate there when it hasn't made a profit yet is very aggressive that's about for comparison for folks who don't -- stocks regularly that's about the size of Kellogg's. A company that is ubiquitous and and -- -- extremely long -- -- history. -- emphasis on profitable there I was just about to ask you advice for retail investor sitting at home I think you kind of explored some of that in your previous answer but if -- they -- about buying in. And yet you someone who does this on the side. As a retail investor would -- say. But I first I would be patient I don't think there's any reason to chase this stock or for that matter very many stocks is again I think there's a lot of froth in general I would also caution retail investors there's nothing wrong with -- in the stock market and it can absolutely be fond. As long as is not the milk money so. I wouldn't put significant funds into something like Twitter if you really believe in this story long term it's okay to put a very small portion that you can take a risk -- money you can lose. Effectively I would -- that would be my advice to two regular folks but more than anything as much as I loved would have the company I would advise -- -- -- care. -- -- isn't a lot of people are doing today which is comparing FaceBook and Twitter we heard Susan solidly in her piece they took a year. For FaceBook to climb back -- what are some of the key differences between these two companies that we should be aware. You don't -- I'm glad you asked because I think these companies are almost polar opposites long term as much as I like Twitter I'm very skeptical of FaceBook in fact I -- short which means I'm actually betting against. The share price I believe FaceBook shares are going to go back down. I'm and my main reason is that FaceBook we talk about social media who really matters it's the young folks and -- very fickle and their choices in social media. They are gravitating ever more away from FaceBook if you talk to people in their teens and twenties. FaceBook is very popular among folks my age among middle aged people but you talk to people in their teens and twenties more and more they are moving their social media presents away from FaceBook and a lot of it by the way is toward. Twitter so given that I think Twitter really owns the future of social media far better than. -- -- He talked about some of Twitter strengths which is its its mobile applications and you feel that that's the way things are going right now a lot of us agree. Sure and you know it is not just my opinion it's really shown that in their ad sales to their ad sales on mobile devices have exploded whereas FaceBook. In to the country faced August had to admit it -- to slow down the number of ads because it's getting to be annoying. To -- users in terms of its mobile experience of Twitter because of the brevity of Twitter because of a 140 characters. It just lends itself perfectly. To mobile and that's where it has the ride -- will continue to try solicit I'm a long term. Bull I'm optimistic. On Twitter but I do think that this kind of -- frenzy. For this stock and for similar stocks lately as social media is a dangerous sign that -- in some months of pretty -- territory. We talk about the young users of all of these platforms these are people who expect everything on the web to be free and and people don't like caddies and there's a lot of resistance already on FaceBook for it. Twitter has not yet made a profit they're going to have to do. Figure out that revenue stream somehow ad sales seem to be the most likely source of that so what are some of their biggest challenges in terms of making this a money maker without really changing the core of the product. Right and that is the challenged by life. I would hold up as an as an example a company who's done it successfully. Is Google they've been able to take what was -- Surely add. Driven revenue model and get really innovative -- a lot of other applications things like android phones so I'm hoping. In twitters case that it can be equally creative and that -- can be -- -- that way can it take the cash flow that it hasn't it doesn't make money and it's not profitable but can it take some of the cash -- -- from advertising and figure out new applications are related. To Twitter can they figure out ways and to be honest I don't know I certainly at 45 dollars a share -- today I am unwilling to make that bet here that they're going to figure out my guess is they will figure out but I don't think the risk reward. At this stock price here is compelling and I would be patient. All right well we all know they've revolutionized our vocabulary let's see what else they can do let's take one last look at the Twitter chart. An excuse me selling at 46 dollars a share Steve -- from Veracruz -- so much for joining us. Thank you -- And this has been -- ABC news digital special report on the Twitter IPO -- Hernandez New York.

This transcript has been automatically generated and may not be 100% accurate.

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