Twitter Inc (NYSE:TWTR) management will officially begin their investor roadshow on Monday. According to David Gelles of The New York Times, CEO Dick Costolo and CFO Mike Gupta have already been visiting some of the nation’s top banks to meet with their sales teams ahead of the company’s initial public offering. Meanwhile the valuation provided in the micro-blogging site’s regulatory filing last night indicated that executives are proceeding cautiously with the IPO.
Tweets about Twitter at banks
Gelles reports that Morgan Stanley (NYSE:MS) was the first stop on Twitter Inc (NYSE:TWTR) executives’ list, although the bank lost out to Goldman Sachs Group Inc (NYSE:GS) for the lead position in the company’s IPO. Morgan Stanley put up a sign on the ticker outside its headquarters in Times Square to greet Twitter executives. Perhaps fittingly, it read: “WELCOME @TWITTER TO @MORGAN STANLEY.” Of course details on the meeting are pretty sparse, but it was expected to be “a low-key meeting” with salespeople who will be accepting orders for Twitter’s IPO.
Odey Asset Management's Special Situations Fund was down 3.2% in March, compared to its benchmark, the MSCI World USD Index, which was up 3.3%. Through the end of March, the fund is up 8.7%, beating the benchmark's return of 4.9%. Q1 2021 hedge fund letters, conferences and more Odey's Special Situations Fund deploys arbitrage and Read More
Other stops on Twitter’s bank tour today include JPMorgan Chase & Co. (NYSE:JPM) and Goldman Sachs.
Twitter provides cautious valuation
Last night Twitter INc (NYSE:TWTR) disclosed the price range for its IPO, which was $17 to $20 a share. That’s a $10.9 billion valuation, and Bloomberg’s Sarah Frier, Lee Spears and Leslie Picker call it “as economical as its 140-character tweets.”
The amount is 9.5 times its projected 2014 sales, and it’s 27% less than the 12.9 times Facebook Inc (NASDAQ:FB)’s shares have been trading at this week and 29% less expensive than LinkedIn Corp (NYSE:LNKD)’s multiple of 13.4 times. Twitter is undoubtedly taking a lesson from Facebook, Groupon Inc (NASDAQ:GRPN) and Zynga Inc (NASDAQ:ZNGA) in determining its IPO valuation. All of those Internet stocks lost more than 50% of their value within the first half year after their IPOs.
Twitter Inc (NYSE:TWTR)’s path has been different from the start though, starting with a private IPO application because its small size allowed it. They may have helped avoid some of the hype pushed Facebook’s valuation up before its IPO.
The micro-blogging site says it plans to sell 70 million shares at its offering.