Twitter debut raises heat in sharemarket
No official date has been set, but Twitter appears on a fast track that could see its initial public offering priced as early as Wednesday for trading on Thursday.
The company will trade under the "TWTR" symbol on the New York Stock Exchange, breaking from the Nasdaq market used by a large number of tech companies.
There is considerable excitement about the IPO because Twitter is "a unique product that no one can replicate", head of equity research at Wedbush Securities Michael Pachter said.
Mr Pachter and his colleagues said in a research report they expected high demand: "We believe that the market is likely to generate appetite for more than $US1 billion ($1.06 billion) in stock. The simple rules of supply and demand suggest that by limiting the supply of shares offered to the public in its IPO, Twitter will be unable to satisfy demand."
Twitter appears to have learnt a lesson from Facebook's debacle in May 2012, marked by trading glitches, accusations about secret information and a plunge in the share value for months after its IPO.
"The Facebook situation last year was a perfect storm of an overheated private market, a fully priced offering, a massive amount of shares brought to market, all compounded by a historical technical glitch," Social Internet Fund founder Lou Kerner said. "That confluence of events is not likely to occur again."
As of its latest update, Twitter will seek to raise up to $US1.6 billion - one 10th the value of the Facebook IPO - by offering 70 million shares in a range of $US17 to $US20.
That is a small chunk of Twitter's capital, and implies a market value between $9.3 billion and $11.1 billion - a conservative figure compared with some of the private-market trades in Twitter.
Analysts say Twitter, unlike Facebook, will not flood the market, and that with demand exceeding supply, the price will rise.
The early Twitter investors may not get maximum value straight away, but could benefit over time from a rise in the share price.
Twitter does have a star quality likely to fuel interest, because it is a key platform for celebrities, politicians and journalists. In its investor presentation, the company used US President Barack Obama's widely retweeted message of "four more years" after his 2012 re-election, and noted how activist investor Carl Icahn's single tweet about buying Apple shares moved the sharemarket.
A crucial question for Twitter, as for Facebook, is how deftly the company is able to monetise its platform.
Twitter has 232 million active users around the world, but has lost money steadily since 2010, according to IPO documents. The losses amounted to $US133 million on US$422 million in revenues in the first nine months of the year.
Twitter makes most of its money from advertising, mainly "promoted tweets". A recent revamping of its display opened the door to bigger display-type ads.
Frequently Asked Questions about this Article…
Twitter's IPO is highly anticipated because it is considered the most awaited debut since Facebook's. The excitement stems from Twitter being a unique product that no one can replicate, and there is a significant demand expected for its shares.
Twitter's IPO is highly anticipated because it's the most awaited debut since Facebook's, marking a major test for social media and the tech sector. The excitement stems from Twitter being a unique product that no one can replicate, which has generated high demand among investors.
While no official date has been set, Twitter is on a fast track that could see its initial public offering priced as early as Wednesday, with trading potentially starting on Thursday.
While no official date has been set, Twitter is on a fast track that could see its initial public offering priced as early as Wednesday, with trading beginning on Thursday.
Twitter has chosen to list on the New York Stock Exchange, breaking from the Nasdaq market, which is commonly used by many tech companies. The article does not specify the reason for this choice.
Twitter will be listed on the New York Stock Exchange under the trading symbol 'TWTR', which is a departure from the Nasdaq market used by many tech companies.
Twitter appears to have learned from Facebook's IPO issues by not flooding the market with shares. Analysts believe that by limiting the supply of shares, Twitter will create a demand that exceeds supply, potentially driving up the share price.
Twitter appears to have learned from Facebook's 2012 IPO issues by not flooding the market with shares. Analysts believe that with demand exceeding supply, Twitter's share price is likely to rise, unlike Facebook's initial post-IPO performance.
Twitter is seeking to raise up to $1.6 billion by offering 70 million shares priced between $17 and $20 each. This implies a market value between $9.3 billion and $11.1 billion, which is considered conservative compared to some private-market trades.
Twitter aims to raise up to $1.6 billion by offering 70 million shares priced between $17 and $20 each, implying a market value between $9.3 billion and $11.1 billion, which is conservative compared to some private-market trades.
A crucial question for Twitter, as with Facebook, is how effectively it can monetize its platform. Twitter primarily generates revenue from advertising, especially through 'promoted tweets,' and has recently revamped its display to allow for bigger display-type ads.
A crucial question for Twitter, as with Facebook, is how effectively it can monetize its platform. Twitter primarily generates revenue from advertising, especially 'promoted tweets', and has recently revamped its display to allow for bigger display-type ads.
Despite having 232 million active users worldwide, Twitter has been losing money steadily since 2010. In the first nine months of the year, it reported losses of $133 million on $422 million in revenues.
Despite having 232 million active users worldwide, Twitter has been losing money steadily since 2010. In the first nine months of the year, it reported losses of $133 million on $422 million in revenues, highlighting the challenge of turning its user base into profit.
Twitter's star quality is fueled by its role as a key platform for celebrities, politicians, and journalists. The company highlighted its influence by showcasing President Barack Obama's widely retweeted message and how a tweet from activist investor Carl Icahn moved the share market.
Twitter's star quality is fueled by its role as a key platform for celebrities, politicians, and journalists. High-profile examples, like President Obama's widely retweeted message and Carl Icahn's market-moving tweet about Apple shares, underscore its influence and appeal to investors.
Call 1300 880 160
Start a chat
Schedule a call
