Twitter IPO valued at $11 billion

Twitter yesterday revealed that its initial IPO value will stand at $11 billion – lower than initial expectations.

The sale is expected to raise up $1.6 billion and looks set for 6 November this year, with Twitter intending to sell 70 million shares between $17 and $20 apiece, which will raise up to $1.4 billion for the company.

Twitter’s entry into the stock market is to become the largest Silicon Valley offering since Facebook’s listing in 2012. Though the social networking site has never made a profit, since 2010, its revenue has grown more than tenfold, now at $317 million.

The sale price is lower than the $15 billion that some analysts had predicted, however the price was cut after Twitter was warned that its growth could slow.

“The fact that the valuation is lower than expectations, I think was smart by the underwriters. I think it will help the pop,” Michael Yoshikami of Destinational Weath Management told Reuters.

“But in the end, even for $11 billion, the question is can they come up with earnings to substantiate that number? And it’s unclear that they’re going to be able to do that.”

Earlier this month, it was revealed in documents filed with US regulators that Twitter has almost 220 million monthly users, with 500 million tweets sent every day.