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Twitter IPO priced at $26 per share


Twitter shares have been priced at $26 per share ahead of its stock market debut valuing the company at more than $18bn (£11bn).
The $26 per share listing is higher than the initially announced range of $23 to $25 announced on Monday with short messaging social media service set to be placed on the New York Stock Exchange (NYSE). The listing will consequently be the biggest IPO (initial public offering) from a technology company since the launch of Facebook on the NASDAQ in 2012.

However, despite boasting over 230 million users, the company is yet to turn a profit. In fact losses of $64.6m were announced for the third quarter of 2013 in comparison with the same period a year earlier. Furthermore, Reuters/Ipsos conducted a survey and claimed that a third of its members do not actually use the service.

Despite findings regarding Twitters profitability, the firm did announce an increase in sales in its third quarter of $168.6m meaning that investors remain “excited” by the company’s potential for growth and the IPO has remained oversubscribed. This has led to Twitters ability to raise the price of the IPO.
The potential of Twitter to make a profit in the future was further backed up by Eden Zoller of consulting firm Ovum who was quoted as saying "Investors see social media and mobile as sweet spots and it is therefore no surprise that Twitter's IPO is creating so much excitement and is oversubscribed."
However, she added that "Twitter needs to step up and deliver on the expectations that are fuelling its valuation, and show that it has what it takes to provide a sustainable business model".

Twitter will be selling 70 million shares on the NYSE under the symbol “TWTR”, which will raise an estimated £1.82bn for the company.

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