"This number is still a reasonable and doable valuation, and I
don't think it's going to turn people off," said Santosh Rao, an
analyst at Greencrest Capital Management LLC. "We've seen this
before, where companies start off with a low number to get people
interested, and then work higher. The demand is there as this is
the last of the big three social networks to go public."
Twitter has attracted more than enough interest to sell all
shares in its IPO before bankers started officially taking orders
for them, people with knowledge of the matter have said. Chief
Executive Officer Dick Costolo has been traveling to major U.S.
cities to drum up interest for the stock, and making the case that
the unprofitable company needs to spend to improve its advertising
products, grow its user base and enhance its infrastructure.
At the top of the range, San Franciso-based Twitter would be valued
at 11.8 times estimated sales in 2014 of $1.15 billion, up from
about 9.5 times in the initial terms, according to analyst
projections compiled by Bloomberg. That compares with Facebook
Inc.'s 11.5 times sales and LinkedIn Corp.'s 12.2 times, the data
Twitter has so far been conservative in its pricing and in its
IPO process, choosing to file confidentially with the U.S.
Securities and Exchange Commission before making its prospectus
public. By raising the price, Twitter is giving in to demand while
seeking to avoid a market debut like that of Facebook.
As analysts, investors and reporters pored over the company's
prospectus, Facebook raised the price of its offering and ended up
in a range that exceeded market demand, causing the stock to drop
below the offering price and take more than a year to recover.
Twitter is set to price its shares on Nov. 6 and begin trading
under the symbol TWTR on the New York Stock Exchange the next day.
Goldman Sachs Group Inc. is leading the offering, working with
Morgan Stanley and JPMorgan Chase
-- Bloomberg News --