Twitter Ups IPO Price Ahead of November 15 Launch

San Francisco, CA – Twitter, the king of SMS social network messages, now believes that its initial IPO price was too generous to investors and has increased the price from the range of $17-$20 to $23-$25. So the question now becomes if Twitter’s stock truly is “all that”.

Twitter is the best known Silicon Valley company to go public since Facebook, though it is seeking a far smaller valuation of up to $13.6 billion compared to Facebook’s $100 billion.

The bay-area based company will be selling 70 million shares in ten days and the adjusted IPO price will add an additional $1.1 billion to their valuation which will stand at $13.9 billion if all shares sell for the target price. With the news IPO price, the company’s co-founder Evan Williams stands to become a billionaire overnight as his 10.4% stake in the company will be worth as much as $1.4 billion. Peter Fenton, who invested early in the company, looks to bag as much as $789 million. The current CEO of the company will net $189 million.

“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.”

So for now, it looks like the guaranteed winners are those who were in at or near the company’s inception (along with their attorneys). Whether those who buy into the IPO or the stock thereafter get a return on their investment is another matter.

In other news, Twitter announced it is in talks with IBM over what they claim are three infringements on their patents. Twitter was cautious not to label IBM as violating their patents.

On The Web:
Twitter ups its IPO price

http://money.cnn.com/2013/11/04/technology/twitter-ipo-price/index.html