Twitter Sets Cautious IPO Stock Price
Posted: October 25, 2013 by Alex Chan
More than a month after Twitter announced they are filling for an IPO, the social networking site revealed its intention to sell 70 million shares priced between $17 and $20 (£10 – £12) in order to raise up to $1.4bn (£865m).
The company disclosed the pricing range in a filing with the Securities and Exchange Commission on Thursday, when was also announced that it has been approved to list on the New York Stock Exchange. As for the date, a person familiar with the timing declared Twitter is hasting its timetable and is even aiming to price its offering on November 6 and start trading the following day.
The offering that represents 13% of Twitter would make the social site more than three times as big as one of the leading Internet giants like AOL, but only a fraction of Facebook, which was the last big Internet initial public offering and now has a market value of more than $127 billion.
According to analysts, the less than the forecast valuation indicates the company aims to avoid the drop that followed Facebook's listing, or as Brian Wieser of the Pivotal Research Group framed it: "They're trying to price this for a very strong IPO, ideally creating the conditions for a solid after-market."
Taking in consideration that Facebook sold more than $400 million shares priced at $38 each and thus raised $16 billion from the public offering, Twitter's IPO will be significantly smaller. But based on the figures, it's very likely Twitter's pricing and number of shares will increase between now and the IPO.