Days after reports came out that Twitter (NYSE:TWTR) is preparing to launch retargeted ads on its mobile platform, shares of the microblogging service rose the most since its initial public offering on Nov 7. The stock closed in New York up 9.32 percent at $49.14.
Bloomberg first highlighted Twitter’s stock record at midday Monday when shares gained 8.4 percent to $48.74 at 1:02 p.m. in New York, reflecting Twitter’s highest rise since going public. Shares then continued to rise throughout the first day of the trading week, and finished at their highest value since early November, evidencing investor confidence that improvements to Twitter’s advertising products will eventually allow the company to meet its valuation expectations. The San Francisco, California-based social media site is now one of the most expensive Internet companies with a market capitalization of more than $27 billion, but unlike rivals Facebook (NASDAQ:FB) and LinkedIn (NYSE:LNKD), Twitter has yet to post a profit, and isn’t even expected to do so until 2016.
According to Bloomberg, Twitter shares now trade at more than 24 times their projected revenue for 2014, and that means the site is more expensive than both Facebook and LinkedIn. Twitter has gained more than 85 percent since its IPO, when shares went for $26 a pop, but many analysts continue to maintain that the blogging service has even greater advertising potential than its competitors, and may even outlive them. Brian Nowak, an analyst at Susquehanna Financial Group explained via Bloomberg, “We’re seeing that there’s a lot they can do with targeting and retargeting for advertisers. Over time it will help them grow into their valuation.”