Twitter Looking to Raise $1.4 Billion from Stock Market Listing
Twitter has confirmed that it plans to raise around US$1.44 billion from its forthcoming stock market listing.
In an update to to potential investors, the microblogging website said that it plans to sell 70 million shares priced between $17 and $20 per share.
That offering represents 13 percent of its shares, and values the company at up to US$11 billion -- assuming that all the shares are sold. However, the price is below some expectations, indicating that the company may be taking a more conservative view in order to avoid the sort of shareprice slump that affected Facebook after its listing.
Twitter's listing on the New York Stock Exchange will make it the largest internet company to file for an IPO since Facebook.
In the filing, Twitter said that it intends to use the net proceeds from the IPO for general corporate purposes, including working capital, operating expenses and capital expenditures. They also may use a portion of the net proceeds to satisfy anticipated tax withholding and remittance obligations.
Although acquisitions are not ruled out, it said that there are no talks with any companies at the moment. On the topic of acquisitions, in the risks listed by Twitter is that companies it works with today on could themselves be bought by a rival.
It cited the example of Instagram, which was bought by Facebook and later disabled the photo integration with Twitter such that Instagram photos are no longer viewable within Tweets.
The company says that it now has over 230 million monthly users, and they send around 500 million messages per day. It has however still reported a loss, of US$69 million on revenues of US$254 million for the first six months of this year. In the three months ended September 30, 2013, over 70% of the company's advertising revenue was generated from mobile devices.
Revenues are rising fast though as the company puts more effort into generating advertising revenues, with some analysts expecting sales to have doubled year-on-year by the end of this year.
The company did warn though that customer growth rates are expected to slow in the future, partially as it reaches the limit of how many people would actually want to use the service.
The company's shares are expected to start trading on the 7th November.