Nov. 6 - Twitter is betting its debut will be very different from Facebook's after pricing its stock above the range at $26 a share but deciding not to boost the size of the highly anticipated IPO. Conway G. Gittens reports.
The Twitter bird is ready to fly and a higher price could determine how far it goes. Frenzy surrounding the hottest company out of Silicon Valley to come to market this year continued with the initial price set above range at $26. The offering size remains at 70 million shares... meaning Twitter will debut on Thursday with a market value of over $14 billion if underwriters exercise overallotment options. That's higher than the $23 to $25 price range just raised two days ago, but below speculation it would price as high as 28 bucks. The pricing fits into Twitter's desire not to repeat Facebook's mistakes, says Reuters West Coast Bureau Chief Jonathan Weber. SOUNDBITE: JONATHAN WEBER, REUTERS WEST COAST BUREAU CHIEF (ENGLISH) SAYING: "They did increase the price as did Facebook but they did not increase the number of shares and I think that was the big error that Facebook made was in both increasing the price and the number of shares at the very end of the period." Limiting supply should drive demand after the debut, giving shares a pop when they open on the New York Stock Exchange. Hours before the pricing, RBC set a $33 price target And Topeka Capital Markets thinks the stock could reach $54 by the end of next year. Even though the company is losing money, Wall Street recognizes the advertising potential is there, because Main Street is there, says University of Southern California Professor Gabriel Kahn. SOUNDBITE: GABRIEL KAHN, JOURNALISM PROFESSOR, UNIVESITY OF SOUTHERN CALIFORNIA (ENGLISH) SAYING: "Now the world has bought the social media story and with Facebook and Google that's been a strong story, not without its bumps and its ups and downs, but it's been a strong story so there's no reason to think that that doesn't have to continue." Bracing for strong demand at the opening - the NYSE is holding a conference call at 8:30am - hoping to avoid the market mayhem that plagued the Facebook debut last year.