Twitter wants to sell shares at $17-$20
Twitter said it plans to sell 70 million shares at $17 to $20 a share that would raise nearly $1.3 billion at the midpoint of the price range.
The New York Times
Twitter disclosed Thursday that it planned to price its eagerly awaited initial public offering at $17 to $20 a share, as it readies a road show for investors.
The company plans to sell 70 million shares. At the midpoint of the price range, the social network would raise nearly $1.3 billion. And the offering would value Twitter on a fully diluted basis at more than $12 billion.
That would make Twitter four times as big as AOL, but only a fraction of Facebook, which has a market value of more than $127 billion.
Company executives and their advisers will crisscross the country, presenting their case in a series of meetings starting Monday in Washington, D.C., and Baltimore. A video presentation will be posted online shortly.
Twitter has also moved up the pricing of its offering by more than a week, to Wednesday, Nov. 6. That means that the social network would then begin trading on the New York Stock Exchange, under the ticker symbol “TWTR,” the next day.
The company’s $12 billion valuation is conservative. Some analysts had expected the figure to be as high as $20 billion. Back in August Twitter priced some of its employee stock options at $20.62, based on an appraisal by an investment firm.
Other publicly traded companies in the $12 billion range include toolmaker Stanley Black & Decker and pharmaceutical company Forest Laboratories.
Twitter’s caution suggests that the company learned from Facebook’s rocky initial public offering last year. Twitter is playing it safe and will very likely raise its price range closer to the IPO, and thus fuel demand.
Facebook’s IPO was marred by technical glitches on the Nasdaq Stock Exchange in May of 2012. As a result, the Securities and Exchange Commission fined Nasdaq $10 million, the largest ever levied against an exchange. Those problems likely led Twitter to the NYSE.
Last week, Twitter disclosed that it lost $65 million in the third quarter, three times as much as in the same period a year earlier. It was the company’s biggest quarterly loss since 2010.
Founded in 2006, Twitter has never posted a profit, but its revenue is growing. Revenue for the latest quarter more than doubled from the same period last year, to nearly $169 million.
The IPO has been long expected. The company has been working to boost ad revenue in preparation.
Still, it’s small compared with Facebook. Twitter says it has more than 230 million monthly users, compared with Facebook’s roughly 1.2 billion.
A big part of Twitter’s appeal is in its simplicity and public nature. Users can send short messages that consist of up to 140 characters.
Anyone can “follow” anyone else, but the relationship doesn’t have to be reciprocal, which makes the service especially attractive for celebrities and companies that use Twitter to communicate directly with fans and customers.
Material from The Associated Press is used in this report.