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Twitter sets IPO price at $26 as some celebrities take a break

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By Noel Young, Correspondent

November 7, 2013 | 3 min read

Twitter has priced its initial public offering of stock at $26 per share tomorrow. But after the Facebook fiasco last year, the San Jose Mercury News wondered yesterday,if it had set the price set too high.

Alec Baldwin: Took a Twitter break

“After all, just a week ago, the microblogging service was still planning to sell its shares for as little as $17 apiece,” said the paper.

Twitter has, however, resisted the temptation to sell more than the 70 million shares it had planned.

“But the final price seems bound to sharpen concerns about a company that's never made a profit and whose business model still baffles many,” said the Mercury News.

In the same paper, a report said that a growing number of celebrities, athletes and self-promoters are “burnt out and signing off of Twitter. Many have gotten overwhelmed.”

Celebrities who -- at one time or another -- have taken a break include include everyone from Alec Baldwin to Miley Cyrus to "Lost" co-creator Damon Lindelof.

Actress Jennifer Love Hewitt “complained of all the negativity" she saw on the service when she quit, temporarily, in July. Actress Megan Fox who had nearly a million followers checked out in January. Pop star John Mayer deleted his account in 2011, saying Twitter absorbed so much of his thinking, he couldn't write a song.

Twitter believes its user base of 232 million will continue to grow along with the 500 million tweets that are sent each day. The company's revenue depends on ads it inserts into the stream of messages.

At its new price, Twitter's valuation is more than $14.4 billion.

Even before the price was revealed , the mainstream and financial media had headlines such as "Don't Chase Twitter's IPO" and "Buzz builds over risks and (possible) rewards."

Gartner analyst Brian Blau,however , was unconcerned .

"I still think they are taking the conservative, or call it a tempered, approach to their IPO," he said. "I really feel that Twitter will be fine post-IPO, as long as they can solve some of their user-retention issues and continue to drive the ad business forward."

Twitter primarily makes money by selling advertisers "promoted tweets" -- mini-ads inserted into the flood of 140-character messages that make up a user's Twitter feed.

When Facebook's stock offering failed to take off, the tech IPO market virtually shut down for two months.

“Many small investors felt burned, especially those not versed in the ways of Wall Street,” said the Mercury News.

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