Twitter is to offer shares to the public at an initial price of $26 a share, the short-message internet giant said on Wednesday in New York after the close of stock markets.
The announcement set the stage for the company’s highly anticipated initial public offering (IPO) on Thursday.
“We’ve priced our initial public offering of 70,000,000 shares ...to the public at $26 a share,” the company said, adding that it could offer an additional 10.5 million shares if demand was strong.
The announcement came after the company had already raised the price range of its share issue to between $23 and $25, citing strong demand from investors.
Twitter managers recently pitched the shares to large investment funds and came away believing there was more interest in the IPO than believed.
That has helped make Twitter’s IPO the most eagerly awaited tech share offering since rival social network Facebook went public in May 2012.
The IPO values Twitter at about $14 billion, far below that of Facebook, which was valued as high as $80 billion at the time of its IPO. Twitter, however, has fewer users and its format makes it harder to advertise on, limiting its chances to immediately generate substantial revenue.
Twitter is also still losing money as it pursues rapid growth. The company said it lost $134 million in the first nine months of the year. At the same time, revenue doubled to $422 million.
The company said it had over 200 million monthly active users and that it processes over 500 million active tweets per day.
According to the prospectus, the largest shareholder is the investment firm Rizvi Traverse, which holds 17.9 per cent of the company’s shares, followed by co-founder Evan Williams with a 12-per-cent share.