Twitter IPO pegs valuation at modest $11 billion

Thu Oct 24, 2013 6:01pm EDT
 
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By Alexei Oreskovic and Gerry Shih

SAN FRANCISCO (Reuters) - Seeking to avoid a repeat of Facebook Inc's much-maligned public debut, Twitter Inc revealed more modest ambitions on Thursday, saying its initial public offering would raise up to $1.6 billion and value the company at up to $10.9 billion.

The valuation was more conservative than the $15 billion that some analysts had expected for the social media phenomenon.

Twitter, which has signaled for weeks that it would price its IPO conservatively to avoid the stock drop that marred Facebook's offering, said that it intends to sell 70 million shares priced between $17 and $20.

If the company's underwriters choose to sell an additional allotment of 10.5 million shares, Twitter could raise as much as $1.6 billion at the top of the price range, according to an amended version of its prospectus filed on Thursday.

Twitter is expected to set the price on November 6, according to a document reviewed by Reuters, suggesting that the stock could begin trading as early as November 7.

"It's conservative and likely going to be raised as they start the road show at least once if not twice," Sam Hamadeh of PrivCo, a private company research firm, said of Twitter's pricing.

"The size of the offering is also a bit small," he added. "But they may only choose to raise the price once they gauge investor demand. Raising both the price and the size was Facebook's fatal mistake."

Twitter said on Thursday that there will be 544,696,816 shares of its common stock outstanding after the offering.   Continued...

 
The shadows of people holding mobile phones are cast onto a backdrop projected with the Twitter logo in this illustration picture taken in Warsaw September 27, 2013. REUTERS/Kacper Pempel