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Twitter sets IPO price at USD 26

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AP New York
Last Updated : Nov 07 2013 | 7:20 AM IST
Twitter has set a price of USD 26 for its initial public offering of stock, which means the company's shares can begin trading today on the New York Stock Exchange.
The price values Twitter at more than USD 18 billion based on its outstanding stock, options and restricted stock that will be available after the IPO.
The pricing means the San Francisco-based short messaging service will raise USD 1.8 billion in the offering, before expenses.
Twitter, which has never turned a profit in its seven years of existence, originally set a price range of USD 17 to USD 20 per share for the IPO, but that was designed to temper expectations. It was widely expected that the price range would go higher. In August, for example, the company priced some of its employee stock options at USD 20.62, based on an appraisal by an investment firm.
On Monday, Twitter raised the price range to USD 23 and USD 25 per share, signaling an enthusiastic response from prospective investors. The company is offering 70 million shares in the IPO, plus an option to buy another 10.5 million. It is set to begin trading today morning under the symbol "TWTR."
Twitter's public debut is the most highly anticipated IPO since Facebook's in May 2012.

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But Twitter has valued itself at just a fraction of Facebook and has sought to cool expectations. The company is likely hoping its stock will avoid the fate Facebook's shares, which didn't surpass their IPO price until more than a year after their offering.
Twitter also has tried to avoid the trouble that plagued Facebook's IPO, which was marred by technical glitches on the Nasdaq Stock Exchange. As a result, the Securities and Exchange Commission fined Nasdaq USD 10 million, the largest ever levied against an exchange. Those problems likely led Twitter to the New York Stock Exchange.
Earlier yesterday, Barclays Capital said Twitter had hired it to be its "designated market maker," a critical role when a stock starts trading. A DMM is an experienced trader who supervises the trading of a company's stock on the NYSE.

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First Published: Nov 07 2013 | 7:20 AM IST

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