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Twitter Sets IPO Price Range At $17 To $20
On the road to Twitter’s IPO in the first week of November, the company has been making sure that it doesn’t face the issue that Facebook faced when it went public. The company has announced that it will be setting the IPO price range between $17 to $20 and will offer 70 million shares. An addition 10.5 million shares could be available depending on the actions of the underwriters. On the higher side of the price range, the company could raise around $1.4 billion.
These IPO numbers are very conservative compared to previous tech company IPOs and this maybe intentional as Twitter wants to avoid the problems that dogged companies like Groupon, Zynga and Facebook when they went public. This conservativeness is also valid compared to the other companies mentioned because Twitter has lower average revenue per user compared to Facebook and also has a much smaller user base of 250 million. Twitter says that the IPO is primarily for the company to get in more capital and thus some flexibility. The company is expected to go on an investor roadshow from Monday onwards and will list on the New York Stock Exchange in the first week of November, possibly November 6th. The company has also secured $1 billion in credit from banks which many speculate will be spent on acquisitions.
The conservative valuation of Twitter at $10.6 billion based on the estimates given above is because Twitter is intentionally trying to be conservative. There is always a chance that the company will set the price higher before the IPO after gauging positive investor interest. Twitter plans to list its stock under ‘TWTR’.
Source | Reuters
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Source: http://www.watblog.com/2013/10/25/twitter-sets-ipo-price-range-at-17-to-20/
