Twitter chose to list in the New York Stock Exchange (NYSE) for its initial public offering (IPO) and its target is to raise approximately $1.5 billion funds, according to report from CNBC based on information from unidentified sources familiar with the decision of the micro blogging company.
The report indicated that Twitter learned from the experience of Facebook (NASDAQ:FB) during its IPO last year, and it does not want to suffer from a similar or any technical glitches during its own public offering. The social network giant listed on Nasdaq exchange operated by the Nasdaq OMX Group (NASDAQ:NDAQ).
Twitter is planning to sell approximately 50 million to 55 million shares during in the public offering. According to the report, the company is considering to offer a price a price range of $28 and $30 a shares.
Based on the proposed offering price, Twitter could raise around $1.45 billion to $1.65 billion. The micro blogging company’s valuation will be around $15 billion to $16 billion. Sources said that the volume and pricing of the stock is not yet final, and the company may change the figures.
In an interview with CNBC, MCO Partners Chairman and CEO, Miles Nadal stated that Twitter’s IPO will be more successful than Facebook because it prepared itself different, more market sensitive, and better timing for social media. Nadal also believe that the company will price its stock and execute it to ensure shareholder appreciation. According to him, he will absolutely buy shares of Twitter once it goes public.
Twitter confirmed the filing of its IPO with the Securities and Exchange Commission (SEC) via tweet on September 12. Analysts and investors had been anticipating its announcement to take the company public over the past several weeks.
Greencrest Capital Management senior analyst, Santosh Rao said, generally it takes at least 40 to 60 days before any company could reach an agreement with regulators. According to him, Twitter’s IPO might occur by the end of 2013 or early next year based on the assumption that its S-1 filing was submitted to the SEC as reported on September 12.
Rao did not discount the possibility that Twitter’s filing occurred three months prior to its disclosure to the public. Rao is expert in private company analysis.
According to eMarketer, Twitter is capable of generating $583 million revenue this year. Its annual growth rate is projected at 40%, which means it would be able to generate $1 billion in 2014.