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Published 03 Nov, 2013 07:47am

Twitter’s IPO to provide excitement

NEW YORK, Nov 2: Twitter will be the talk of Wall Street next week when the social media company goes public in the stock market’s most anticipated initial public offering since 2012’s Facebook.

Twitter is expected to price its IPO on the evening of Nov 6 and begin trading Nov 7 on the New York Stock Exchange under the symbol.

“It’s not just about the stock. Twitter’s IPO will be a measure of how much liquidity is out there,” said John Rutledge, chief investment strategist at SAFANAD, a private investment firm in New Canaan, Connecticut.

Twitter has said it will sell 70 million shares at a price between $17 and $20, valuing the online messaging company as much as $11 billion, below the $15bn that some analysts had been expecting.

The market will be on alert to see if Twitter follows the fate of last year’s botched Facebook Inc IPO: the social networking company’s stock hit the market in May 2012 and was plagued by allocation problems, trading glitches and a selloff.The shares did not recover the IPO price until a year later. Views have been mixed on what investing strategy to take for Twitter’s IPO. According to a Reuters survey of 29 broker-dealers and independent advisers, 23 said they are not recommending Twitter shares.

Only one said he would recommend it — and only to certain clients. Five others said they would wait to snap up the stock if it plunges after it begins to trade. But while retail interest might be low, tech industry analysts say there is expected to be a good appetite for Twitter’s stock from institutional investors at the current valuation.

On Friday, Morningstar joined three other brokerages in setting price targets for Twitter Inc well above its IPO price range, suggesting the stock has room to rise at least 30 percent.

The Wall Street brokerages set a price target of $26 a share. Last month, Pivotal Research had set its price target at $29 a share, SunTrust at $50 and Topeka Capital at $54.—Reuters

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