Twitter has publicised the price range it expects to sell its shares at when it goes ahead with its initial public offering, setting the price at between £10 and £12 to raise as £865m.
This valuation for just 13 per cent of the micro blogging platform puts its total value at somewhere in the region of $11bb but is nevertheless less than forecast – possibly in a bid to avoid the slump in price seen after Facebook’s fitful listing.
That saw its stock priced initially at $38 per share before it soared to $45 and then collapsed.
Twitter is the largest tech firm to go public since Facebook and has enjoyed a steady uptick in users since its launch seven years ago with 218m monthly users and 500m tweets a day sent.
These numbers haven’t yet translated into profits however with Twitter posting a loss of $69m in the first half of this year on a turnover of $254m.
Michael Yoshikami of Destinational Wealth Management commented: "The fact that the valuation is lower than expectations, I think was smart by the underwriters. I think it will help the pop.
"But in the end, even for $11bn, the question is can they come up with earnings to substantiate that number? And it's unclear that they're going to be able to do that."