Twitter Prices IPO At $26 Per Share

Twitter, the quirky 140 character messaging service that’s become a global phenomenon, priced its initial public offering at $26 per share, valuing the seven-year-old company at over $18 billion.

Twitter (TWTR) will raise $1.8 billion to fund future expansion by selling 70 million shares, which will open for trading on Thursday morning on the New York Stock Exchange. Some analysts say the shares are worth $50 or more, so the price could explode higher once trading begins.

Started in 2006 as a simple way to share short messages and status updates among friends, Twitter has grown to 232 million active users who post 500 million tweets per day about everything from personal thoughts to celebrity gossip and breaking news.

The deal is the highest profile Internet IPO since Facebook (FB) raised $16 billion last May. And Twitter could rank as the second-largest debut of a U.S. Internet company in history if it ultimately surpasses the $1.92 billion raised by Google (GOOG) in its 2004 IPO, according to Dealogic. Underwriters of the Twitter deal have the option to sell up to another 10.5 million shares, if needed, under a standard IPO clause called the greenshoe option, pushing the total value to over $2 billion.

Twitter goes public as a much smaller company. It brought in just $534 million of revenue for the 12 months ended September 30 leading to a net loss of $137 million. Facebook had revenue of $3.7 billion and $1 billion of profit when it went public.

The deal makes Twitter co-founder and former CEO Evan Williams a billionaire, at least on paper. Williams owns 56.9 million shares of Twitter, worth $1.5 billion at the IPO price. Jack Dorsey, another co-founder, owns 23.5 million shares worth over $600 million.