Twitter shares priced at $26 ahead of New York Stock Exchange debut
November 7, 2013 - 10:53 AMT
PanARMENIAN.Net - Twitter shares have been priced at $26 each, ahead of its debut on the New York Stock Exchange (NYSE) on Thursday, November 7, according to BBC News.
That is above the $23 to $25 range announced on Monday and values the short messaging service at more than $18bn.
That makes it the biggest market debut for a technology firm since Facebook went public in May 2012.
Twitter has attracted 230 million users since starting seven years ago, but is yet to make a profit.
Its losses for the third quarter of 2013 increased to $64.6m, from $21.6m a year earlier and a recent poll by Reuters/Ipsos showed that more than a third of registered users do not use the service at all.
Nevertheless there was strong demand for the shares and the company was able to raise the offering price twice.
Some analysts said that investors were excited by Twitter's potential for growth.
"Investors see social media and mobile as sweet spots and it is therefore no surprise that Twitter's IPO is creating so much excitement and is oversubscribed," said Eden Zoller of consulting firm Ovum.
However, she added that "Twitter needs to step up and deliver on the expectations that are fuelling its valuation, and show that it has what it takes to provide a sustainable business model".
The firm has posted an increase in its sales, which more than doubled in third quarter to $168.6m, and it is looking to raise even more revenue from advertisers outside the United States.
Mark Mahaney at RBC Capital Markets said that he expected the firm's shares to rise after listing.
"Just as Google, Amazon and Facebook have become Internet utilities, so too may Twitter," he said.
"As a public, real-time, conversational and distributed platform, Twitter is becoming an essential service for consumers, businesses, media companies, and advertiser."
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