Twitter Reveals its Stock Market Price Range

After signifying an Initial Public Offering (IPO) in a move to open its doors to stock market investments, Twitter has revealed Thursday its plan to sell 70 million shares. The aim is to raise up to $1.4 billion when it pegs each of its share between $17 and $20. The offer constitutes 13% of Twitter’s $11 billion worth.

Safety net

Market experts believe that the appraisal value set by Twitter is the company’s way of setting up a safety net to avoid the impact in the event that the stock market suffers price dip such as what happened when Facebook listed in. Further observations state that the company is evidently trying to gain strong leverage right at the onset through a strong IPO so that it can capture a solid market afterwards. To recall, Facebook was first valued at $38 per share, resulting to a sudden increase of a high $45 but later fell down heavily. Analysts attributed the fault to the social network company’s overpriced shares that created an imbalance and artificial price surge in the market. Recently Facebook has started to regain its losses and is now trending up in price listing.

Conservative offer

During the regulatory filing on Thursday, Twitter said if the initial $70 million target shares are successfully sold, the stakeholders can conduct a follow up share purchase amounting to as much as 10.5 million shares. According to the social media network’s executives, the share cost being offered is comparatively conservative since Twitter is expected to put up the most competitive IPO to close this year’s stock market dispatch. When valued at $20 per share, the market worth of Twitter would be as much as $12.5 billion which is about a tenth of Facebook’s present value. The basis for this valuation is Twitter’s anticipated 625.2 million post-offering shares that include limited stock units and alternative stocks.

Stock market name

Twitter, based in San Francisco, is poised to use the symbol TWTR when it starts trading this November at the New York Stock Exchange. Today is the company’s initial staging at the stock exchange with potential investors making close watch as they wait to throw in their stakes. Initially, market analysts had predicted Twitter to release an IPO of as much as $20 billion since it put a $20.62 price option to its employees in August during an evaluation work done by an investment group. Nonetheless, stock market experts interpret the lower offer as a regulatory measure to cushion the impact in case Twitter incurs losses in the process of its first investment offer.

Lesson well learned

Twitter has been cautiously treading the rope in the investment field because it does not want to experience a similar setback that Facebook suffered in its initial IPO in 2012. Stock market analysts say that the price range of Twitter’s IPO is moderate and safe, a good indication that eventually, it may rake in substantial profits at a steady and secure pace.