Twitter IPO details announced
Twitter has released the details of its IPO on the New York Stock Exchange, as 70 million shares prepare to go on sale at a price of $26 (£16.70).
This is lower than the Facebook IPO price, in which shares were valued at $38 (£23.64). Despite shares being offered at a lower price than they were for Mark Zuckerberg's Facebook, the share valuation still leaves Twitter valued at over $14bn (£8.7bn).
Learning from Facebook's mistakes?
While Facebook's share prices have since recovered strongly ($49.12 at the time of writing), the IPO for the social media giant was widely regarded as a disaster, with shares plummeting as low as $11 at one stage. This may explain why Twitter has chosen to offer their shares at a lower price, as they look to avoid suffering a similarly disappointing launch.
The IPO is particularly important for Twitter as the company does not actually turn a profit, despite a total of 883 million accounts having been created on the social media platform, with around 232 million of these active every month.
Tomas Freyman, director of valuations at BDO, believes that Twitter may experience a similar result, commenting: "Despite Twitter's price range valuing being more modest than some of the numbers bandied about over the last few weeks, this is still very high for a company that has yet to make any profits."
Despite these fears, the launch is sure to be a highly rewarding day for many within Silicon Valley, including co-founders Ev Williams and Jack Dorsey, both of whom own millions of shares and will add over $1bn to their personal fortunes.
Daniel Nolan, managing director at theEword commented: "This is the highest profile IPO in the technology industry since the much publicised Facebook launch, and is sure to attract a great deal of interest across the globe. It will be extremely interesting to monitor the fluctuations in the price, and whether or not lessons have been learnt since their biggest rival's disastrous opening day."