Ahead of its highly-anticipated public debut, Twitter priced its initial public offering Wednesday evening at a $26 per share, which is 40% above the social-media company’s earlier range.
The valuation highlights the strong demand for the micro-blogging company, whose potential has captured the imagination of investors but financial profile remains immature. Twitter has yet to turn a profit, has seen its losses accelerate and is valued at a relatively expensive level when compared with other recent tech IPOs.
In a tweet, Twitter revealed it priced its shares at $26 a piece, allowing it to raise as much as $2.1 billion. By raising that amount, Twitter will become the second-largest Internet IPO by an American company, behind Facebook’s $16 billion but just ahead of Google’s $1.92 billion, according to Dealogic. At that price level, Twitter would have a market capitalization of $14.4 billion.
Twitter, which was founded in 2006 and is based in San Francisco, originally expected to price its IPO at $17 to $20 per share, but then raised that range to $23 to $25 due to strong demand. Reports on Wednesday indicated it could price as high as $28.
The company is set to debut on Thursday on NYSE Euronext's (NYX) New York Stock Exchange under the ticker symbol “TWTR.”
Twitter, which allows its 230 million active users to post 140-character messages, has become a valuable tool for celebrities, advertisers, journalists and even investors. Today, more than 500 million tweets are shared on the service each day.