70 million shares priced at £16 will be available at Twitter IPO on the New York Stock Exchange
Twitter shares have been priced at $26 (£16.10) a piece ahead of the company’s expected flotation on the New York Stock Exchange (NYSE) today, the second time the price has gone up since its Initial Public Offering (IPO) was announced, giving the company a valuation of more than $18 billion (£11bn).
The firm is selling 70 million shares, which will raise $1.82 billion for the company, and is the biggest IPO is the biggest by a technology company since Facebook’s controversial offering in May 2012.
Facebook debuted on the NASDAQ, the technology industry’s stock exchange of choice, but the launch was marred by delays and glitches. Twitter has been keen to avoid a repeat of the situation and has instead opted for the NYSE, which has already completed trading tests of stock.
Twitter first announced its IPO plans last month, and priced its shares at between $17 and $20 (£10-12). The modest valuation was also influenced by Facebook’s IPO, which saw shares valued at $38 apiece, giving the company a total value of $104 billion, but the value of Facebook shares slumped dramatically, although they have since reached record levels.
However Twitter has upped the price, confident it can attract investors. Analysts are optimistic about the potential growth of the company, and believe its share price will rise following the listing.
However they have warned that Twitter must create a sustainable business plan. The firm’s S1- filing with the US Security and Exchange Commission (SEC), a form completed by almost all companies planning to go public, revealed it currently has 218.3 million active users and generated $253.6 million during the first half of 2013, but has yet to record a profit.
The majority of its income comes from advertising in the form of promoted Tweets and accounts, although it makes some money by licensing the use of its aggregated data to other companies. Things are moving in the right direction however. Sales doubled during the third quarter of 2013 to $168.8 million and the company is looking to generate more revenue outside the US in the future.
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