Looks like Twitter’s investor roadshow has gone well. When the social network goes public, it’ll do so at US$26 a share. With the company initially set to release 70-million shares, that means it’ll raise US$1.82-billion from the IPO.
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The details, which were revealed via a tweeted announcement from the company, mean that on IPO day Twitter could have a value as high as US$18-billion (based on 705-million fully diluted shares).
We just priced our IPO. pic.twitter.com/NWXaO4Myq0
— Twitter (@twitter) November 6, 2013
As TechCrunch notes, the pricing is above what Twitter itself has been saying over the last little while but still within the low range of expected estimates.
That suggests that while the investor roadshow has most likely gone very well, the company’s still erring on the side of caution. In turn, that suggests Twitter is still doing everything it can to avoid treading down the same path Facebook did with its IPO (it’s even chosen a different, less volatile, stock exchange).
Following its IPO, Facebook’s share price plummeted, only recovering in recent months after it doubled down on mobile advertising.
As we’ve previously noted however, it’s well worth remembering that Twitter isn’t Facebook. For one, it doesn’t have the weight of expectation that Facebook did when it went public. That’s partially down to the immediate fallout after Facebook’s IPO and partially down to its lower user numbers and revenues (remember that its S-1 filing revealed that it’s actually been operating at a loss).
It’s also worth bearing in mind however, that Twitter has pretty much been mobile from the start, meaning that it, as Memeburn columnist Hilton Tarrant notes, “has solved whatever ‘mobile conundrum’ Wall Street will assume exists. Twitter has mobile at its core. More than half its traffic (and revenue!) is on mobile”.
If it can use the cash injection from the IPO and its mobile savvy to make the company profitable (partnerships with the likes of Nielsen aren’t exactly hurting here) then it should have a much smoother time of things on the stock market.