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Monday, 4 November 2013
Twitter Boosts IPO Price for Valuation Up to $13.6 Billion
Twitter Inc. increased the price of shares in its initial public offering by as much as 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. Twitter Inc. increased the price of shares in its initial public offering by as much as 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.
New Valuation
At the top of the range, San Francisco-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. (FB)’s 11.5 times sales and LinkedIn Corp. (LNKD)’s 12.2 times, the data show. Twitter will have 544.7 million shares of common stock outstanding after the IPO, the filing shows. Including restricted stock and options, Twitter will have about 694.8 million shares outstanding. By that measure, at the top end of the range Twitter would be valued at $17.4 billion.
The company 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, owner of the world’s largest social network, last year. 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 initial price and take more than a year to recover.
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