Twitter thinks it’s worth $11 billion
Twitter Thinks it’s Worth $11 Billion, Social Media Phenomenon,. Seeking to avoid a repeat of Facebook Inc’s much-maligned public debut,...
Seeking to avoid a repeat of Facebook Inc’s much-maligned public debut, Twitter Inc revealed more modest ambitions, saying its initial offering would raise up to $1.6 billion and value the company at up to about $11 billion.
The valuation was more conservative than the $15 billion some analysts had expected for the social media phenomenon, potentially attracting inve-stors who might consider the money-losing company’s listing price a better deal, with room to rise.
Twitter had signaled for weeks it would price its IPO modestly to avoid the sort of stock plummet that spoiled Facebook’s coming-out party. It said on Thursday it intends to sell 70 million shares between $17 and $20 apiece, raking in up to $1.4 billion for the company. If underwriters choose to sell an additional allotment of 10.5 million shares, the offer could raise as much as $1.6 billion.
Twitter’s offering will be the most high-profile Internet IPO since Fac-ebook’s May 2012 debut, when the social network giant’s shares fell below their offering price and did not recover until a year later. Even then, the modest pricing does not obscure questions about Twitter’s profitability.
“The fact that the valuation is lower than expectations, I think was smart by the underwriters. I think it will help the pop,” said Michael Yoshikami of Destinational Weath Management.
“But in the end, even for $11 billion, the question is can they come up with earnings to substantiate that number? And it’s unclear that they're going to be able to do that.”
At $11 billion valuation, Twitter would be worth more than Yelp Inc and AOL Inc combined, but only a fraction of tech giants like Google and Apple, worth $342 billion and $483 billion. Facebook’s value is now $128 billion.
12 Dec 2019 11:28 AM GMT