Twitter Sets IPO Price Range, Valued at Up to $11.1 Billion Deal Could Price in First Week of November
A user checks a Twitter feed on a smartphone at an office in London. Photo: Bloomberg News By TELIS DEMOS Twitter Inc. set its price range for its initial public offering at $17 to $20 a share, in a deal that values the company at up to $11.1 billion. The setting of a price range means Twitter can begin shopping to investors its IPO, which is slated to raise up to $1.6 billion. The process would begin with company officials meeting with salespeople at the investment banks, then with investors. The offering is expected to be one of the most anticipated of a recently rejuvenated technology IPO market, as Internet and technology companies that have grown to multi-billion-dollar valuations in private markets look to go public. In a "roadshow" where the company pitches its shares, the San Francisco-based company could face tough questions from investors about whether its 140-character microblogging service can continue to grow its user base and eventually turn profits from the advertising it sells. Twitter has grown to more than 250 million monthly active users since the first tweet was sent in 2006, by co-founder Jack Dorsey. The timing of the offering is indicative of the speed at which Twitter has moved since it first confidentially filed plans for its IPO in July. The filing with the range information is set to come just after the end of the 21-day period that the Jumpstart Our Business Startups Act, or JOBS Act, requires for IPO paperwork to be public before a pricing range. Twitter made its filing public on Oct. 3. but before that had filed confidentially with the Securities and Exchange Commission, which the JOBS Act allows for certain companies. The roadshow, where investors can put in requests for how much stock they want, and at what price, would last about a week or so, according to the people familiar with the plans. After that, Twitter and its bankers will set a final price, around Nov. 6, they said. The shares, which are to be listed on the New York Stock Exchange, would begin trading the next day. As currently envisioned, the roadshow would be shorter than Facebook Inc.'s, which took two weeks from the release of its price range to the final pricing. In that time Facebook raised its price range and increased the size of the deal. Twitter could also do the same, if the company feels that demand warrants. However, Facebook's shares began tumbling shortly after its IPO. In part, the offering was affected by a glitch at the Nasdaq Stock Market. But some traders and investors also said that Facebook's raised price and expanded size of the offering caused them to sell. Twitter is aiming for an IPO price that avoids Facebook's fate, but also one that doesn't produce an enormous "pop," or first day jump, people familiar with the company's thinking have said. A big pop can be a sign that the company didn't raise as much money as it could have.