Rare inside look: Getting Twitter to its first trade
You don't get to go behind the scenes to watch underwriters get an IPO ready to begin trading very often, but we did it with Twitter.
You can watch this dramatic minute-by-minute look at how it was done.
9:00 a.m.: I start with NYSE CEO Duncan Niederauer and a discussion of how long Twitter may take before it opens.
Then just prior to the 9:30 open I bring in Scott Cutler, head of listings at the NYSE, who gives us a behind-the-scenes look at how lead underwriter Goldman Sachs will build a book of buyers and sellers for the stock, and how they will determine what the opening price will be.
9:30 a.m.: The market opens. Twitter CEO Richard Costolo participates in the opening bell ceremony. Cutler and I cover the initial price indications and how those indications are set. We discuss how much stock will be offered by the underwriters, and how they determine how much will be sold at the open. It all happens as brokers in the crowd are shouting out orders to buy and sell tens of thousands of shares while a "town crier" yells out the latest price indications.
9:31 a.m.: We cover the earliest preliminary price indications: $35 is the initial indication, up significantly from the $26 IPO price.
9:48 a.m.: The price indication is now $40-$44, with significant additional buyers sitting on the sidelines. We discuss what that means for the opening price.
10:03 a.m.: The pricing narrows to $44-$45. It appears ready to open shortly, but minutes later a new spate of buyers appears, and the price indication moves to $45-$46.
10:19 a.m.: The price indications widen to $43-$47 as the size of the book "increases" to accommodate both additional buyers and sellers.
10:22 a.m.: The price indications again go to $45-$46.
10:39 a.m.: The indications narrow to $45.50-$46.
10:47 a.m.: Twitter opens at $45.10. Trading is smooth at the open, with no trading halts.
11:01 a.m.: A postmortem look at how much was sold at the open (about 10 percent of the amount offered), and we show how the designated market maker in charge of ensuring an orderly market in the stock is still very busy.
- By CNBC's Bob Pisani