Twitter sets modest share price for IPO

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Twitter sets modest share price for IPO

Twitter sets modest share price for IPO
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We now know what sort of price Twitter will be looking for as it launches on the stock market – and it is on the low side.

The online messaging service is anxious to avoid the sort of share price slump that Facebook suffered when it went public.

So when Twitter shares start trading on the New York Stock Exchange they are likely to have come to market at between $17 and $20 each (12.3 to 14.5 euros).

How enthusiastic investors are in the run-up could boost the price a bit.

That range means that eight years after it was set up the entire company would be worth around $11 billion (7.97 billion euros).

Sam Hamadeh of PrivCo, a private company research firm, said
Twitter could raise the price range and also the number of shares being sold. But, he added: “Raising both the price and the size was Facebook’s fatal mistake.”

The problem for Twitter is that although it has 230 million active users – including major celebrities and heads of state – it still operates at a loss.

The bosses will therefore be under pressure from those new investors to improve its money-making ability.

Twitter’s offering will be the most high-profile internet IPO since Facebook’s May 2012 debut, when the social network giant’s shares fell below their offering price and did not recover until a year later.