New York - Twitter Inc. rose the most since its initial public offering to a record close as new advertising products spurred optimism about the social-networking company’s future sales growth.
Twitter shares gained 9.3 percent to $49.14 at the close in New York for the biggest jump since November 7, the stock’s first day of trading, when it climbed 73 percent and touched an intraday high of $50.09.
With a market capitalisation of $27.9 billion, the microblogging service is among the most expensive Internet companies.
The company has been adding features for advertisers to help them reach its more than 230 million users.
Last week, Twitter expanded a tool that lets marketers target consumers who have already expressed interest in their products based on Web-browsing histories.
Such new offerings are helping 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,” Nowak said in an interview.
“Over time it will help them grow into their valuation.”
He has the equivalent of a hold rating on the stock.
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 about 25 times projected revenue for 2014.
That makes it more expensive than competitors Facebook Inc., with a price-to-sales ratio of about 12, and LinkedIn Corp., which trades at about 13 times estimated revenue.
Twitter has gained 89 percent since its IPO, when shares went for $26 apiece. - Bloomberg News