Twitter to raise $1.8 bn in IPO

Pricing at $26 a share values company at $14.2 bn

Twitter has priced 70 mn shares of common stock at $26 each to raise $1.8 bn in its initial public offering, the company says.

The pricing of the biggest IPO since Facebook’s public offering in May 2012 values Twitter at $14.2 bn. The shares were set above Monday’s asking price of between $23 and $25 per share.

‘In addition, we’ve granted the underwriters a 30-day option to buy up to 10.5 mn shares of common stock,’ Twitter says in a press release tweeted on its micro-messaging social network. The stock is set to start trading on the NYSE today under the symbol TWTR.

The company, which has 232 mn users, says the money raised from the IPO will help it expand its business internationally, develop new technologies and products to attract more revenue from users, and grow its infrastructure. The firm, which started life seven years ago, has yet to make a profit, however, with Q3 2013 losses rising to $64.6 mn, up from $21.6 mn for the same period last year. A recent Reuters/Ipsos poll also shows that more than a third of registered users are not actually using the service at all.

Goldman Sachs Group is leading the IPO, working with Morgan Stanley and JPMorgan Chase & Co, Twitter says. Allen & Co and CODE Advisors are acting as co-managers.

Unlike the Facebook IPO, Twitter’s offering comes during a surging equities market, with several major stock indexes at or near record highs. The $26-a-share sale price beats the asking price of between $23 and $25 set earlier this week, which itself was an increase on the initial price range of $17 to $20.

Twitter’s IPO will likely face intense scrutiny after the glitches in 2012 that marred the IPO of Facebook, which was fraught with problems right from the start and struggled for a year to return to its initial sale price. The social network, which hosted its IPO through NASDAQ, suffered a series of technical glitches and communications failures at launch, after which its share price was held back as senior executives sold large stakes.

Listen now to Neil Stewart, IR Magazine’s editorial & research director, talking tech IPOs on NPR’s Morning Edition.


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