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Twitter Shares Priced at $26

Twitter Shares Priced at $26

Twitter is going public and it has priced it’s shares at $26 each. Twitter will debut on the New York Stock Exchange (NYSE) on Thursday.

That is above the $23 to $25 range announced on Monday and values the short messaging service at more than $18bn (£11bn).

That makes it the biggest market debut for a technology firm since Facebook went public in May 2012.

Twitter has attracted 230 million users since starting seven years ago, but is yet to make a profit.

Its losses for the third quarter of 2013 increased to $64.6m, from $21.6m a year earlier and a recent poll by Reuters/Ipsos showed that more than a third of registered users do not use the service at all.

Nevertheless there was strong demand for the shares and the company was able to raise the offering price twice.

Some analysts said that investors were excited by Twitter’s potential for growth.

“Investors see social media and mobile as sweet spots and it is therefore no surprise that Twitter’s IPO is creating so much excitement and is oversubscribed,” said Eden Zoller of consulting firm Ovum.

However, she added that “Twitter needs to step up and deliver on the expectations that are fuelling its valuation, and show that it has what it takes to provide a sustainable business model”.

Twitter’s $18bn valuation includes the value of shares in compensation schemes for employees and other share awards.

It is selling 70 million shares, which will raise $1.82bn, for the company.

Unlike Facebook, Twitter has chosen to trade its shares on the New York Stock Exchange.

Facebook’s debut on the Nasdaq – traditionally the market of choice for technology firms – was marred by delays and problems with orders.

The NYSE has already tested trading of Twitter’s shares to try to avoid any technical hitches.

The shares will trade under the symbol “TWTR”.

Source: BBC News

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