Twitter hopes to raise £865m from share issue
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."