Value Of IPO Of Twitter Raised By 25 Percent

Value Of IPO Of Twitter Raised By 25 Percent

The initial public offering or IPO of Twitter was increased by 25 percent, which will allow the microblogging website to raise around $1.75 billion.

Seventy million shares, priced between $23 and $25, are being offered in the IPO of Twitter based on a recent regulatory filing. An earlier proposal of the company was between $17 and $20 per share. Interest in the shares of the company increased before orders were officially received by bankers.

Twitter CEO Dick Costolo visited major cities in the United States explain the need for the company to spend in order to enhance its advertising products, increase its user base and improve its infrastructure.

The top range would have a value of 11.8 times projected sales in 2014 of around $1.15 billion, which is higher than the 9.5 times of the initial price range. Common stock outstanding of Twitter will reach 544.7 million shares following the IPO. When restricted stock and options are included, the company will have around 694.8 million outstanding shares. This indicates that Twitter will have a value of $17.4 billion.

The pricing of the IPO of Twitter has been conservative and the company opted to confidentially file with the Securities and Exchange Commission of the US before announcing its prospectus. The prospectus of the company was examined by investors, analysts and reporters.

Twitter also revealed that a letter was sent by IBM Corp alleging that the company infringed three US patents of IBM. The letter invited Twitter to negotiate a resolution to the allegations. IBM is the biggest US patens recipient in the last twenty years and receives around $1 billion of licensing revenue each year.

The price of the shares of Twitter will be set on November 6 and will be traded using the symbol TWTR. The IPO of Twitter is being led by the Goldman Sachs Group Inc, which is collaborating with JPMorgan Chase & Co and Morgan Stanley.

Posted by James Fried on Wednesday November 06 2013, 2:28 AM EST. Ref: Bloomberg. Link. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0