Twitter had a massive day in the markets, soaring more than 11 percent following news this morning that it has acquired Gnip.
Gnip is a company that provides other firms with access to social media information streams. Gnip became well known by being a Twitter partner that could provide the latter’s “firehose” of tweets to companies willing to pay for access.
The acquisition should funnel Twitter’s current customer base toward Gnip’s popular tools, as well as accrete Gnip’s top line to its new parent. Twitter needs revenue growth and more monetization avenues. Gnip won’t help Twitter with its nearly stagnant active user growth, but Gnip’s current and growing revenues could help Twitter extend the financial growth that investors are expecting.
As a company, Twitter also picked up a key hire today: Google Maps guru Daniel Graf to help leads its consumer-facing product work. That, the Gnip news, and indication that Twitter is bullishly releasing its earnings ahead of a key employee equity unlock period have contributed to the company’s buoyant stock price.
Twitter’s spike of 11.38 percent in regular trading added billions to its market cap. Twitter closed yesterday at $40.87 and today at $45.52. Using Google Finance’s share count of 589.45 million, Twitter gained value worth $2.74 billion.
The company, along with a large cadre of other quickly growing technology companies, has had a rough 2013, falling from 52-week highs as investors retreated from former levels of optimism. Twitter, despite trading far above its IPO price, is far below its 52-week high of more than $74 per share.
Twitter’s large pop today was both in contrast to the U.S. market’s modest gains and small pickups by Facebook and other analogous stocks. After a long decline, Twitter shareholders have something to cheer about.