With the Twitter IPO launching today investors simply couldn’t get enough of the company leading up to the big day. According to a Reuters report investors were asking for 30 times the number of shares that were on offer via the New York Stock Exchange.
As SND reported on Wednesday, Twitter chose to up its asking price from $17-$20 to a higher $26 per share. The target range among many analysts had already been set at $23 to $25. Based on Twitter’s IPO value its founders are placing a $14.1 billion valuation on the company. That valuation could increased to $14.4 billion if 10.5 million additional shares are exercised before the end of the trading day.
If the full allotment is exercised Twitter would raise $2.1 billion, making it the second largest internet offering of all-time in the United States. Last year Facebook set the record with its $16 billion IPO.
According to a recent report ten institutional investors will receive 50 percent of the deal with 750 accounts receiving less than 10,000 shares.
To ensure a smooth process the New York Stock Exchange held a mock trading period several weeks prior to the IPO. It was the first time that the NYSE worked to ensure a flawless system. As we reported yesterday Barclays will also act as the designated market maker (DMM). That role requires trades to be made from the floor without computer assistance. DMM’s are unique to the NYSE because unlike other exchanges it is not a fully automated system.
While Twitter claims 230 million global users among its ranks, the company still reported a $65 million loss in the most recent quarter, and that loss coupled with increasing business expenses has left some analysts with questions about the company’s ability to continuing to scale and build new revenue models.
Does the Twitter IPO deserved to be subscribed 30 times over? Only time will tell, and that time needs to include a new level of “stickiness” so users stay on Twitter for longer periods of time and engaged more naturally with users.
Watch a live stream of the Twitter IPO opening bell and floor action below (video live while it happens):
[Image via Digital Trends]