Twitter Raises Estimated IPO Price Range To $23-$25

(RTTNews) - Social media giant Twitter, Inc. (TWTR) raised the estimated pricing range for its 70.0 million common share initial public offering to between $23 and $25 per share, according to a regulatory filling on Monday. The move is said to have come after its road show which saw strong interest from institutional investors. The company had earlier estimated a pricing range of $17 to $20 per share on October 24.

The San Francisco, California-based company also revealed in the amended form S-1 filing with the U.S. Securities and Exchange Commission that it has been sued by IBM over three patent infringements.

Twitter now expects to raise up to $2.0 billion in proceeds from the IPO, up from the prior estimation of about $1.61 billion, if the underwriters' option is exercised in full.

The company has granted underwriters a 30-day option to buy up to an additional 10.50 million common shares at the IPO price less the underwriting discount, to cover over-allotments, if any.

The company said it has received approval to list its common shares on the New York Stock Exchange under the ticker symbol 'TWTR'. Twitter is reportedly expected to price the IPO as early as Wednesday to make its trading debut on Thursday.

The company noted that it will have 544.7 million shares of common stock outstanding after the offering, which will immediately give the company a market value of up to $13.6 billion, based on the raised estimated range.

Upon completion of the offering, the company said executive officers, directors and holders of 5 percent or more of its common stock will beneficially own, in the aggregate, about 51.4 percent of the outstanding shares of its common stock.

Twitter said it plans to use the net proceeds from the IPO to acquire businesses, products, services or technologies, as well as for general corporate purposes, including working capital, operating expenses and capital expenditures.

Twitter had in early October publicly unraveled its IPO plans exactly three weeks after it took its first step towards an IPO by filing a confidential registration statement on form S-1 with the U.S. SEC on September 12. The company had revealed this in a tweet posted on its microblogging site, and originally intended to raise up to $1 billion.

Like other social media networks, Twitter's main source of revenues is from advertisements posted on its site alongside the tweets through smartphones and other mobile devices. Twitter has experienced rapid growth in revenues in recent periods, with revenues tripling in fiscal 2012 to $317 million. Net loss also narrowed by 38 percent to $79 million from last year.

Goldman Sachs Group, Inc. (GS) will be the lead underwriter for the offering, with Morgan Stanley (MS), J.P. Morgan Chase & Co. (JPM), Bank of America Merrill Lynch and Deutsche Bank AG (DB) servings as co-underwriters. Goldman Sachs, Morgan Stanley and JPMorgan also ran the Facebook, Inc. (FB) IPO last year, where Morgan Stanley was the lead underwriter.

Twitter will be the first social media company to go public since the troubled Facebook IPO in mid-May 2012. Twitter is among the last of the major developed social networks to file for an IPO. The current success of Facebook and Linkedln stock should provide the required support for the Twitter IPO in the public market.

Twitter was founded in March 2006 by Jack Dorsey, Evan Williams and Biz Stone. It is an Online social networking service and microblogging service that enables its users to send and read text-based messages of up to 140 characters, known as "tweets".

The company revealed in a tweet on its seventh birthday on March 21 that it has well over 200 million active users creating over 400 million Tweets each day, which has now gone up to 500 million tweets per day.