NEW YORK — Twitter co-founder Evan Williams is now a multibillionaire on paper, after shares of the short- messaging website rose 73 percent on the first day of trading.
The stock surged to $44.90 at the close in New York from the initial public offering price of $26. Williams, the largest individual shareholder with a 10.4 percent holding, owns a stake valued at $2.56 billion.
Williams, who co-founded San Francisco-based Twitter in 2006 out of his failed podcasting startup Odeo, is among the biggest beneficiaries of the IPO. Others include early backers such as Rizvi Traverse Management, which holds almost 16 percent valued at $3.82 billion. Insiders held onto their shares, anticipating that Twitter will deliver on promises to increase advertising revenue and add more users.
“We’ve never sold a share,” said Deven Parekh, managing director at Insight Venture Partners, an investor in Twitter. “We think It’s a great long-term business. There have been historical opportunities for investors to get liquidity based on earlier rounds that were done. People are really believers in the story.”
Twitter’s shareholder base has swelled to include venture-capital investors such as Benchmark and Union Square Ventures and celebrities such as Ashton Kutcher and Richard Branson. The company sold $1.82 billion of shares in the IPO, the biggest U.S. technology offering since Facebook Inc.’s debut last year.
At the current price, Twitter has a market capitalization of $24.9 billion.
Jack Dorsey, a Twitter co-founder who already became a billionaire last year from his stake in payments company Square Inc., will add $1.05 billion to his fortune, including options. Union Square Ventures, which contributed a few million dollars in Twitter’s first investment round in 2007, has a stake of about 5.1 percent, worth $1.25 billion.
Spark Capital, which invested in the company in 2008, owns about 6 percent of Twitter’s shares worth $1.46 billion. Benchmark, which led a $35 million investment in Twitter in 2009, bought another $9.1 million in shares in 2011. Its stake is worth $1.42 billion.
Twitter’s executives and directors won’t be able to sell their stock for 180 days, a standard lockup waiting period. Some non-executive employees may be eligible to sell almost 10 million shares as soon as Feb. 15, the prospectus shows.
Chief Executive Officer Dick Costolo has been talking to employees about managing their personal finances at the company’s weekly meetings, according to a person with knowledge of the matter, who asked not to be identified because the discussions are private.
The insiders are taking a risk by holding their shares, as other recent consumer-technology companies have struggled in the months following their market debuts. Facebook’s stock dove below its $38 offering price and took more than a year to recover. Groupon is down 50 percent from its 2011 IPO price, while Zynga Inc. has declined 64 percent.
Twitter, which posted a loss of $64.6 million in its latest quarter, isn’t projected to report a profit until 2015, according to analysts’ estimates compiled by Bloomberg.
Facebook’s debut last year created 850 new millionaires, many of whom decided to invest their wealth in emerging technology companies such as Instagram Inc., Spotify Ltd. and Flipboard Inc. They also looked for new places to live, contributing to surging real-estate values in Silicon Valley.
Facebook raised $16 billion, valuing the social network at $104 billion in the biggest technology debut on record. More than 50 individuals and institutions own Twitter shares through direct purchases, secondary sales and acquisitions, and hundreds more are invested through funds.