Twitter ups IPO price before going public later this week

The San Francisco-based microblogging site is likely to be valued at $13.6 billion

Topics: Bloomberg, Twitter, NYSE, IPO, Internet, Stock Market, , , ,

Twitter ups IPO price before going public later this week

(Updates with analyst’s comment in the 3rd paragraph.)

 

Nov. 4 (Bloomberg) — Twitter Inc. raised the price of shares in its initial public offering by as much 25 percent, putting it on track to raise $1.75 billion amid brisk demand.

The microblogging site is offering 70 million shares for $23 to $25 each, a regulatory filing today shows, indicating a market value of as much as $13.6 billion. Twitter had earlier proposed selling shares for $17 to $20 apiece.

“This number is still a reasonable and doable valuation, and I don’t think it’s going to turn people off,” said Santosh Rao, an analyst at Greencrest Capital Management LLC. “We’ve seen this before, where companies start off with a low number to get people interested, and then work higher. The demand is there as this is the last of the big three social networks to go public.”

Twitter has attracted more than enough interest to sell all shares in its IPO before bankers started officially taking orders for them, people with knowledge of the matter have said. Chief Executive Officer Dick Costolo has been traveling to major U.S. cities to drum up interest for the stock, and making the case that the unprofitable company needs to spend to improve its advertising products, grow its user base and enhance its infrastructure.

 

New Valuation

 

At the top of the range, San Franciso-based Twitter would be valued at 11.8 times estimated sales in 2014 of $1.15 billion, up from about 9.5 times in the initial terms, according to analyst projections compiled by Bloomberg. That compares with Facebook Inc.’s 11.5 times sales and LinkedIn Corp.’s 12.2 times, the data show.

Twitter has so far been conservative in its pricing and in its IPO process, choosing to file confidentially with the U.S. Securities and Exchange Commission before making its prospectus public. By raising the price, Twitter is giving in to demand while seeking to avoid a market debut like that of Facebook.

As analysts, investors and reporters pored over the company’s prospectus, Facebook raised the price of its offering and ended up in a range that exceeded market demand, causing the stock to drop below the offering price and take more than a year to recover.

Twitter is set to price its shares on Nov. 6 and begin trading under the symbol TWTR on the New York Stock Exchange the next day. Goldman Sachs Group Inc. is leading the offering, working with Morgan Stanley and JPMorgan Chase & Co.

–Editors: Mohammed Hadi, Jillian Ward



 

To contact the reporters on this story: Sarah Frier in New York at sfrier1@bloomberg.net; Leslie Picker in New York at lpicker2@bloomberg.net

 

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 11
  • Close
  • Fullscreen
  • Thumbnails

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    Elliott and the friends with whom he recorded in middle school in Texas (photo courtesy of Dan Pickering)

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    Heatmiser publicity shot (L-R: Tony Lash, Brandt Peterson, Neil Gust, Elliott Smith) (photo courtesy of JJ Gonson photography)

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    Elliott and JJ Gonson (photo courtesy of JJ Gonson photography)

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    "Stray" 7-inch, Cavity Search Records (photo courtesy of JJ Gonson photography)

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    Elliott's Hampshire College ID photo, 1987

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    Elliott with "Le Domino," the guitar he used on "Roman Candle" (courtesy of JJ Gonson photography)

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    Full "Roman Candle" record cover (courtesy of JJ Gonson photography)

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    Elliott goofing off in Portland (courtesy of JJ Gonson photography)

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    Heatmiser (L-R: Elliott Smith, Neil Gust, Tony Lash, Brandt Peterson)(courtesy of JJ Gonson photography)

    "Roman Candle" turns 20: Secrets of Elliott Smith's accidental masterpiece (slideshow)

    The Greenhouse Sleeve -- Cassette sleeve from Murder of Crows release, 1988, with first appearance of Condor Avenue (photo courtesy of Glynnis Fawkes)

  • Recent Slide Shows

Comments

Loading Comments...