Twotation: Twitter reckons it's worth $11bn

The company has revealed the price range for its shares. They're not cheap.

by Emma Haslett
Last Updated: 07 Nov 2013

Another step on the road to what, in the grand twadition of all things Twitter, we will henceforth refer to as ‘Twotation’: the company today revealed the price range for its shares.

In a filing this morning, it said it was hoping to sell 70 million shares, each priced at between $17 and $20 (£10-£12), which will, stock market meltdowns (cf. Facebook) notwithstanding, raise $1.4bn for the company.

Those 70 million shares constitute 13% of Twitter – which values the entire company at $11bn. Although that’s less than originally thought, suggesting Twitter would rather avoid the same fate as Facebook, which priced its shares at an optimistic $38 and then watched in horror as, after an initial peak, their value plummeted (to be fair, after just under 18 months, they’re now trading at $52.44 – so it worked out in the end).

Still: with that value, Twitter will be the second-biggest company ever to go public. According to documents it filed as part of the listing (twisting?), it has 218 million monthly users and 500 million tweets are sent a day. Despite those numbers, though, it still hasn’t quite figured out how to turn a profit: in the first half of this year, it made a loss of $69m on revenues of $254m.

Although some analysts have questioned whether, with numbers like that, it can possibly justify its value, others point out that revenues have risen from $28m in 2010 to $317m to the end of 2012. So it’s definitely got potential.

It could do worse than to ask Samsung Electronics for advice: the company has today announced a 26% jump in profits during its third quarter, with profits of 8.24tn won (£4.7bn).

Not surprisingly, the company said sales of smartphones had been a key driver of growth (that’s a bit like McDonald’s saying burgers are a key driver of growth). Its semiconductor business (which supplies arch-nemesis Apple) was also strong: it doubled its profits two more than 2.1tn won, apparently because of a rise in chip prices after a fire at a plant owned by one of its rivals.

The company has been the biggest smartphone manufacturer in the world for a while now, but the new race is on to see whether it can become the biggest manufacturer of ‘wearable tech’, too. It launched its smart watch – the Galaxy Gear – last month. Can it beat the rival wearable alliterative gadget the Google Glass? Or will they have to get into bed with a freshly-floated Twitter and launch the Twatch? It's gripping stuff.

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