14 DAY TRIAL // The Twitter IPO is about to go underway, and so far it's looking good. The company has already gotten orders for a big chunk of the shares that are going to be offered through the public trading markets.
In a tweet, obviously, Twitter announced that it was making available 70 million shares for today's initial public offering, priced at $26 (€19.22), higher than the initial guidance which put shares at between $23 and $25 (€17 and $18.48).
This puts Twitter's valuation at $14.1 billion (€10.42 billion), but underwriters also have the option to buy more shares than the ones available, which would push the valuation to $14.4 billion ($10.65 billion). When you factor in shares issued to employees and execs, that shoots up to $18.1 billion (€13.38 billion).
The company also wants to raise a significant amount of money, as much as $2.1 billion (€1.55 billion), making the largest IPO in the US since Facebook's debut last year.
The hope though is that Twitter's IPO will go better than Facebook's, which suffered from trading glitches and some worrying reports about its mobile revenues, which made investors lose confidence.
That said, Twitter doesn't exactly inspire a lot of confidence either. The company's $14.4 billion valuation is significantly above its revenue, which is growing but still small – $422 million (€312 million) for the trailing nine months in September, not to mention its profits, which are nonexistent.
At the current total valuation, each Twitter user, out of the 230 million or so, is valued at more than $78 (€58). In all likelihood, the shares will go up from their initial $26 during the first day, so the company may end the day being valued at even larger sums.
All in all, the numbers show the hype surrounding tech companies and the most anticipated IPO of the year. Twitter has always had a good image. Even when very few people were using it, a lot more were talking about it. It seems that the constant media exposure helped it with its IPO too.