Twitter could price its IPO well above the new $23-$25 range it set earlier today, according to MicroVentures CEO Tim Sullivan. The pricing range was originally set at at $17-23. Though he’s providing no guarantees, Sullivan says that there has been strong interest in the private market for Twitter shares over the past few months, which indicates that Twitter could price as high as $25-28 when it finalizes its S-1 this week.
A recent report from Bloomberg is also quoting ‘sources’ which say that the pricing will be above the increased range. The report indicates that pricing will happen on Nov. 6th, which has previously been bandied about. If the pricing went through at $25, that would mean a $1.75B raise for Twitter, at a value of over $13.5B.
The new range is based on interest that Sullivan says MicroVentures has been tracking in Twitter’s private market sharing. The crowd funding platform has been offering shares of the extremely limited and high-interest stock for a while now. the pricing in the private market has been running up hard over the last year. Sullivan notes that it was priced at around $15 last summer, $17 in December, $20 in March and $30 in September. Bids were entered at around $35 recently but could not be filled because the demand was so high.
“We’ve been seeing 300x demand on whatever [shares] we had,” Sullivan told us. Not a lot of people own Twitter and there wasn’t a lot of access to the shares, making the demand very high.
Twitter’s initial price range was seen as very aggressive, leading to nearly immediate oversubscription talk. That indicated to many that it could afford to bump up its range, which it did this morning. Though private-market pricing is not used by banks to set a public price range — that’s more about fair market value and ongoing interest after the roadshow period — it’s often a strong indicator of what kind of performance we can see out of the stock after offering.
Most of the liquidity events that Sullivan has been a part of have ended up trading at or above the private market values, especially lately. He points out LinkedIn as an example of a particularly high-interest post IPO. Interestingly, Sullivan also calls out Twitter as having an ‘extremely professional’ cap table with a hard-core vetting process. He contrasts this with Facebook’s IPO, which has been noted as an example of a poorly handled offering by many.