Twitter sets IPO price - now worth $18b

Twitter has set a price of $US26 for its initial public offering of stock, which means the company's shares can begin trading Thursday on the New York Stock Exchange.

The price values Twitter at more than $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 $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 $17 to $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 $20.62, based on an appraisal by an investment firm.

On Monday, Twitter raised the price range to $23 and $25 per share, signalling 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 Thursday morning under the symbol "TWTR."

Twitter's public debut is the most highly anticipated IPO since Facebook's in May 2012.

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 $10 million, the largest ever levied against an exchange. Those problems likely led Twitter to the New York Stock Exchange.

Earlier on Wednesday, 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. If technical problems arise, the NYSE uses DMMs to bypass electronic trading systems, allowing humans to trade a company's stock. That is not possible on all-electronic stock exchanges such as the Nasdaq.

Twitter lets users send short messages, or "tweets," in 140-character bursts and has attracted world leaders, religious icons and celebrities, along with CEOs. It now has more than 230 million users, more than three-quarters of them outside the US.

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