Twitter might have wanted a quiet IPO, but massive demand for the relatively limited shares in its flotation are driving its listing price higher. According to CNBC, Twitter will go public at $27 per share, far above its initially expected $17 to $23 range. Quick math indicates that such a price would value Twitter at roughly $14.7 billion.
Twitter would raise around $1.9 billion at $27 per share, provided that it doesn’t increase the number of shares that it intends to sell shortly. Facebook, for example, also raised its offering price before its IPO and the number of shares that were for sale.
However, Twitter’s current updraft is due in part to the smallness of its offering, so I would not expect that. It should be noted that Twitter underwriters have the option to purchase an additional 10.5 million shares should certain conditions be met.
As a company, Twitter’s losses are currently accelerating as it expands its international advertising offerings. A stronger IPO, which would raise more funds for the company, could help it accelerate its revenue growth by providing cash flow flexibility. That said, a larger IPO in terms of dollars raised also raises the specter of a potentially larger fall.
Whatever the case, investors are speaking quite loudly: Twitter shares, please.