Twitter shares to rocket
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New York - Twitter Inc shares were indicated at between $42 and $46 in a sign they would rocket higher in opening trade as investors bet on potential growth at the money-losing social media company.
If the shares start trading at $42, that would amount to a 62 percent jump from the $26 initial public offering price set on Wednesday, making it the biggest in a series of huge opening day “pops.”
The microblogging network priced its 70 million shares at above the targeted range of $23 to $25, which had been raised once before.
The IPO values Twitter at $14.1 billion, with the potential to reach $14.4 billion if underwriters exercise an overallotment option.
If the full overallotment is exercised, as expected, Twitter could raise $2.1 billion, making it the second largest Internet offering in the United States behind Facebook Inc's $16 billion IPO last year and ahead of Google Inc's 2004 IPO, according to Thomson Reuters data.
Twitter boasts 230 million global users, including heads of state and celebrities, but it lost $65 million in its most recent quarter and questions remained about long-term prospects.
It also lacks the ubiquity of Facebook or the “stickiness” factor that keeps people checking the No. 1 social network on a daily basis.
A Reuters-Ipsos poll last month showed that 36 percent of people who signed up for a Twitter account say they do not use it. - Reuters