Twitter Inc. TWTR +4.79% shares have nearly tripled since their initial public offering last month, including an almost 5% gain on Thursday, making the microblogging site's IPO one of the best performing this year.
Investors like Reuben Kressel, 66 years old, of Rego Park, in the New York borough of Queens, are helping to fuel the rise. He bought 500 shares earlier this month when the stock was priced at $52. Mr. Kressel, who doesn't use the site, said he was initially intrigued because many analysts and investors weren't enthusiastic about the stock's prospects, and he wanted to go against the grain.
"Everybody was against it, and every day it was going up," said Mr. Kressel, who follows markets on a daily basis.
Twitter's stock has risen 76% this month and has surged 182% since the San Francisco company's IPO in early November. On Thursday, the shares closed at $73.31, notching another 4.8% rise and a fifth consecutive day of gains.
The company now sports a $39.9 billion market capitalization, ahead of Target Corp.'sTGT +1.25% $39.5 billion market value and Time Warner Cable Inc. TWC -0.53% 's $37.6 billion market cap, according to FactSet. While Target reported third-quarter earnings of $341 million and Time Warner posted a $532 million quarterly profit, Twitter lost money. If it were in the S&P 500 stock index, Twitter would land in the top 20% of biggest companies.
Twitter, which people use to communicate about matters from entertainment to news to their personal lives, hasn't had any big announcements since its Nov. 6 IPO that would necessarily drive trading. The run-up in Twitter's stock has coincided with changes in its products, including a face-lift of its mobile app and the inclusion of photos and videos on a user's main news feed. For advertisers, Twitter has been adding more tools to target specific users and ways to track an ad's effectiveness.
Investors' excitement comes despite a drumbeat of skepticism from stock analysts. Nineteen of the 26 Wall Street analysts that cover Twitter have the equivalent of "hold" or "sell" ratings on it, according to Thomson Reuters.
Analysts have attributed the stock's rise partly to "momentum"—or people buying a stock just because they think others will do the same—and partly to faith in Twitter's future.
"It appears valuation metrics are irrelevant," Blake Harper, an equity-research analyst at Wunderlich Securities Inc. in Baltimore, wrote in a note to clients earlier this week, referring to the stock's price versus measures such as profits, which Twitter lacks, and revenues.
"There's a certain mystique surrounding a company like Twitter, a name recognition that is giving it a boost, or a premium valuation," Mr. Harper said in an interview. "If there's enough people that believe this company is such a great media and tech platform of the future, they're going to buy into it."
A Twitter spokesman declined to comment.
Twitter isn't the only social-media company whose stock is booming. Shares of FacebookInc. have risen 4.7% since the company joined the S&P 500 late Friday. The social network has gained 23% this month and 117% for the year. The Global X Social Media Index, which tracks social-media stocks, is up 65% this year and hit a new high on Thursday.
Twitter is the top-performing U.S.-listed IPO for 2013 among deals that raised more than $100 million, according to data provider Dealogic.
Twitter's rally caps a banner year for IPOs, which had outperformed the S&P 500 through mid-December. On average, companies that went public in the U.S. this year have risen 32% from their IPO price and jumped 17% on their first day of trading, according to Renaissance Capital data through Dec. 13. That makes 2013 the best year for IPO returns since 2004, according to Renaissance data.
Brokers attribute the zest for Twitter both to individual and institutional investors, such as hedge funds and mutual funds.
Frank Davis, director of sales and trading at Lek Securities Corp., credits some of Twitter's recent rise to year-end buying by professionals. "Twitter now is a name people know and has been doing so well that when institutions are reviewing their year-end portfolios they want to be able to go to investors and say they've been in it," he said.
Trading volume in Twitter shares—a sign of interest in the stock—has surged in recent days, with more than 82 million shares changing hands on Thursday. That amounted to more than five times the stock's 30-day average trading volume, according to FactSet. By comparison, overall market volumes have been broadly lower amid the holidays. Thursday, U.S. stock-trading volume hit a low for the year, not counting abbreviated trading sessions.
Rachel Shasha, a self-taught trader in New York who has been trading for the past several years, said she wasn't ready to buy Twitter at the IPO, but once people started becoming more downcast on the stock several weeks ago, she decided it was time to buy.
"Everyone was so bearish, but people use Twitter like there's no tomorrow," said Ms. Shasha, who bought the stock when it traded around $40 a share.
"My original target was $60. I've been slowly exiting since then, but I still have some of my position," she said. "Everyone is starting to chase the stock. I'd rather keep my gains and miss out on some if I have to."
Mr. Kressel, of Queens, said he doesn't expect to own the stock for the long term. Once it drops a few bucks, he says he is going to sell.
"I have my hands on the sell button," he said. "If it goes down, I'm out of here."
