Twitter Limits IPO Valuation, Just Like Its Tweets

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Twitter Inc. (TWTR) is seeking a valuation of 9.5 times 2014 sales in its Initial Public Offering next month, according to data filed with the Securities and Exchange Commission yesterday, which would seem to extend the company’s economical approach of tweet characters to its stocks as well. The valuation comes 27 percent lower than the current rate of Fecebook Inc (FB) at 12.9 times 2014 sales, and 29 percent below Linked In Corp. (LNKD)’s 13.4 times 2014 sales.

The company that has popularised maxim-like short messages across the globe highlights in its relatively low valuation decision that it does not want to repeat history by following in the footsteps of Facebook, Groupon Inc. (GRPN) and Zynga Inc. (ZNGA), all of which lost more than half their value in the six months following their IPOs Twitter CEO Dick Costolo approach, in fact, has distinguished the company from its internet peers, as the filing to go public happened confidentially to avoid unnecessary hype that could drive prices up.

Twitter is planning to sell 70 million shares, which amount to a 13 percent stake, between $17 and $20 to raise about $1.4 billion, according to yesterday’s filing.

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