7 Nov 2013

Twitter prepares for Wall Street listing

2:26 pm on 7 November 2013

Twitter is on the verge of revealing the price of its stock offering, in one of Wall Street's most highly anticipated floats.

Earlier this week, Twitter raised its non-binding price range to $US23 - $US25 a share.

Twitter plans to sell 70 million shares, with a possible over-allotment of 10.5 million.

Converting the range into New Zealand dollars, the price is about $28 - $30.

Twitter is taking a cautious approach in its IPO, but it still must convince investors of its business model, having lost more than $440 million since 2010.

However, with 232 million users and growing, it is expected to reach profitability by delivering advertisements in the form of promoted tweets and from its data analytics.

First Mark Capital founder and managing director Rick Heitzmann says despite it making a loss, Twitter is a widely recognised brand and different from the dot-com "boom and bust" type companies.

"If you look at Twitter, if you look at Facebook, these are companies that are growing incredibly quickly, have tens of millions of daily users all over the world and are building a tremendous network effect," he says.

"I think it would be almost impossible to replicate Twitter today and therefore it's a premium company at a premium price."