Twitter sets $17 to $20 per share price range for IPO
In this Feb. 2, 2013, file photo, a smartphone display shows the Twitter logo in Berlin, Germany. (AP / Soeren Stache)
Published Thursday, October 24, 2013 6:07PM EDT
Last Updated Thursday, October 24, 2013 6:37PM EDT
NEW YORK -- Twitter has set a price range of $17 to $20 per share for its much-anticipated initial public offering and says it could raise as much as $1.6 billion in the process.
Twitter Inc. said in a regulatory filing Thursday that it is putting forth 70 million shares in the offering. If all the shares are sold, the underwriters can buy another 10.5 million shares.
At the $20 share price, Twitter's market value is around $12.5 billion. That's based on 625.2 million outstanding shares expected after the offering, including restricted stock units and stock options.
Twitter's valuation is relatively 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.
The caution shows that Twitter learned from Facebook's rocky initial public offering last year. Rather than set expectations too high, Twitter is playing it safe and will very likely raise its price range closer to the IPO, and thus fuel demand.
Not surprisingly, Twitter's IPO will be much smaller than Facebook's, which was marred by technical glitches on the Nasdaq stock exchange in May of 2012. Those problems likely led Twitter to the New York Stock Exchange.
The San Francisco-based short-messaging service plans to list its stock under the ticker symbol "TWTR" on the New York Stock Exchange. The shares will likely start trading in the next few weeks. Twitter will now begin its IPO "roadshow," meeting with prospective investors to pitch its stock.
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. Twitter has never posted a profit.