Twitter has announced their highly anticipated IPO with $26 per share beginning from Thursday on the NYSE (New York Stock Exchange).
After the announcement of the share price, the total value of the Twitter can move more than $18 billion with its outstanding stock, options and restricted stock which will be available after the Initial Public Offerings. In this regard the micro blogging social network overtakes Macy and Bed Bath & Beyond, which has a market capitalization around $17 billion and $16 billion respectively.
With $26 per share pricing on their 70 million shares, the Twitter will raise $1.8 billion in the offering prior to expenses. There is an option to buy another 10.5 million shares after the IPO – if all shares sold, the company will raise $2.09 million net. From Thursday onwards, Twitter will be in the trading platform by the name TWTR.
Twitter tweeted with an image, which showed detailed information in form of text. The tweet embedded below:
We just priced our IPO. pic.twitter.com/NWXaO4Myq0
— Twitter (@twitter) November 6, 2013
Twitter’s IPO debut is highly anticipated after the debut of Facebook IPO in May 2012.
Twitter was ever turned into a profitable business in its 7 years of existence and previously set the share price range of $17 to $20 per share for the IPO. It’s highly expected that the price range would jump as it priced some of Twitter’s employee stock options at $20.62 after appraisal from an investment firm and it seems that the value has not plunged since then. Twitter raised the price range to $23 and $25 per share on this Monday for seeking high response from wannabe investors.
Facebook IPO debuted in NASDAQ and the debut was marred by technical problems over there, which led the Securities and Exchange Commission to fine $10 million to NASDAQ Stock Exchange, which is the largest ever fine against a stock exchange till date. So, may be, Twitter decided to debut at NYSE.
Twitter’s $18 billion valuation is around 28 times of its projected 2013 revenue of $650 million, whereas Facebook’ current value is roughly 16 times of its projected 2013 revenue and Google is trading at around 7 times of its net revenue, according to analyst from FactSet.
Ken Doctor, analyst at Outsell Inc. said that the Twitter’s fundamental value is almost half of the IPO price based on revenue and revenue growth factors.
Let’s see, what magic will Twitter do in Wall Street. What is your opinion? Will it take the path of Facebook by plunging down from IPO price and rise after 1 odd year? Have your say in the comments field below. Stay tune on The Next Digit for more updates.
Image Credit: Laughing Squid