Excitement for Twitter Inc’s coming initial public offering (IPO) is running pretty high, so much so that some investors on Friday mistook the nearly worthless stock of long-dead electronics retailer Tweeter for the tweeting site, sending shares up more than 1,000 percent.
Tweeter Home Entertainment Group, a specialty consumer electronics company that went bankrupt in 2007, saw its most active day of trading in more than six years even though it has nothing to do with the social media site.
The stock, which trades over the counter, closed on Thursday at a price of less than US$0.01 a share and hit a high of US$0.15 a share on Friday. More than 14.3 million shares had traded by midday.
The volume marked an all-time high for the stock, surpassing the 13.05 million shares traded on May 10, 2007, when the company reported quarterly results and said it may choose to file for Chapter 11.
Shares were halted by the US Financial Industry Regulatory Authority at 12:47pm, with the stock up 684 percent at US$0.051, under the terms of Rule 6440, which the agency uses in “circumstances in which it is necessary to protect investors and the public interest.”
To say that the stock is normally lightly traded is an understatement. Sometimes several days go by without even 1,000 shares traded over the course of a full session.
However, Tweeter’s share price and volume ticked higher following Twitter’s announcement on Sept. 12 that it had confidentially filed for an IPO.
The moves since then through Thursday were not nearly as extreme, with the stock reaching a high of US$0.035, and between 200,000 and 1.1 million shares traded.
Tweeter filed for bankruptcy in June 2007 and its assets were acquired by Schultze Asset Management on July 13 of that year, according to a filing with the US Securities and Exchange Commission. A representative for Schultze was not immediately available for comment.
Twitter publicly filed its IPO documents on Thursday, setting the stage for one of the most anticipated debuts in more than a year.