Twitter will start trading at $26 when it goes on sale, according to an announcement made today by the company on Twitter. That’s on the low side of expected pricing but still above the new official range that Twitter released yesterday.
At $26 the proceeds of the sales of 70 million shares of common stock will net it $1.82 billion. This means that the company has a valuation of $14.16 billion based on 545 million non-diluted shares or a maximum of approximately $18.1 billion based on 705 million fully diluted shares.
At that pricing, Twitter co-founder Evan Williams owns a 10.4% stake not including options, which is worth $1.48B. Jack Dorsey’s stake is worth $609M and investor Peter Fenton’s clocks in at $820M. Twitter CEO Dick Costolo’s slice sits at $199M. By far the largest stake is held by Rizvi Traverse which holds 16% valued at $2.21B. Union Square Ventures is set to benefit with a $723.8M stake.
Twitter pricing chatter has been hot and heavy over the past few weeks, with some predicting that it would price its IPO well above the new $23-$25 range it set earlier this week in a revised S-1 filing. The pricing range was originally set at $17-$23, which many considered very low and which drove high demand. Yesterday, we noted that Twitter could easily price as high as $25-$28 on IPO.
MicroVentures CEO Tim Sullivan told us that the pricing in the private market has been running up hard over the last year. Sullivan noted 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.
Twitter’s aggressive pricing early on led to oversubscription chatter.
Much of the talk about Twitter’s IPO pricing in the run-up has been about comparisons to Facebook’s relatively disastrous offering. It had many issues including a high price, disappointing opening and behind-the-scenes drama, but has eventually far surpassed its opening price of $38 per share.
Twitter’s indicated revenue over the past quarter was $169 million, though it also scored a net loss of $64 million over the same period. Twitter will list on the NYSE under the symbol ‘TWTR’.
Image Credit: Garrett Heath/Flickr CC
Comment