Seeking to avoid a repeat of Facebook Inc’s much-maligned public debut, Twitter Inc revealed more modest ambitions, saying its initial public offering (IPO) would raise up to US$1.6 billion and value the company at up to about US$11 billion.
The valuation was more conservative than the US$15 billion some analysts had expected for the social media phenomenon, potentially attracting investors who might consider the money-losing company’s listing price a better deal, with room to rise.
Twitter had signaled for weeks it would price its IPO modestly to avoid the sort of stock plummet that spoiled Facebook’s coming-out party. It said on Thursday it intends to sell 70 million shares between US$17 and US$20 apiece, raking in up to US$1.4 billion.
If underwriters choose to sell an additional allotment of 10.5 million shares, the offer could raise as much as US$1.6 billion.
Twitter’s offering will be the most high-profile Internet IPO since Facebook’s debut in May last year, when the social network giant’s shares fell below their offering price and did not recover until a year later. Still, the modest pricing doesn’t obscure questions about Twitter’s profitability.
“The fact that the valuation is lower than expectations, I think was smart by the underwriters. I think it will help the pop,” Michael Yoshikami of Destinational Weath Management said.
“But in the end, even for US$11 billion, the question is can they come up with earnings to substantiate that number? And it’s unclear that they’re going to be able to do that,” he said.
At a roughly US$11 billion valuation, Twitter would be worth more than Yelp Inc and AOL Inc combined, but only a fraction of tech giants like Google Inc and Apple Inc, worth US$342 billion and US$483 billion respectively. Facebook’s market value is now US$128 billion.
Twitter and its underwriters begin a two-week road show to woo investors next Monday in New York, with stops in Boston and the mid-Atlantic region before touching down in Chicago, San Francisco, Los Angeles and Denver, according to a source familiar with the offering.
The company could choose to raise the price of the offering during that period as it gauges interest. Twitter is expected to set a final price on Nov. 6, according to a document reviewed by reporters, suggesting that the stock could begin trading as early as Nov. 7.
Twitter will sell roughly 13 percent of the company in the IPO and will have 544,696,816 shares outstanding after the offering. That figure could rise given the exercising of options, restricted stock units and the issuance of shares for compensation after the IPO.
The firm plans to list its stock under the “TWTR” symbol on the New York Stock Exchange.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts