Hoping to avoid a disappointing IPO like rival Facebook, Twitter is being cautious with its IPO, pricing its shares between $17 and $20. That should bring in about $1.4 billion for the social media giant.
The value of Twitter is being marked at around $10.9 billion, cheaper than Facebook and LinkedIn, according to Bloomberg and the company's IPO plan. Facebook's IPO opened at $38 per share and declined for months. It wasn't until more than a year later when it was finally able to make up the difference.
"Twitter does not have as many active users out of the gate; however, let's not forget that while its IPO may be cheaper than Facebook's, Twitter still has great momentum with revenues more than doubled annually," said Sheryl Kingstone of Yankee Group. "While it hasn't yet turned a profit and the pace of user gains are slowing, Twitter's popularity on mobile phones will eventually help advertisers. The future opportunity is all about mobile advertising, which is still in its infancy. Facebook took a year to recover, but it also hiccupped on its mobile story, a lesson Twitter is learning from."
Twitter's IPO is set to debut on Nov. 6.