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Exclusive: Twitter Picks NYSE for $1.5B IPO

NEW YORK (TheStreet) -- Looking to learn from the past, social media company Twitter will list on the New York Stock Exchange in an IPO estimated to net around $1.5 billion, sources close to the situation have said.

Twitter, the San Francisco-based social media company that tweeted out news it had filed its S-1 to the SEC for its planned initial public offering, is looking to avoid the glitches and hoopla that were troublesome when Facebook (FB) went public last year.

Facebook listed on the Nasdaq exchange, owned by Nasdaq OMX (NDAQ), en route to selling more than $16 billion worth of stock, becoming the largest tech offering in U.S. history.

Twitter is taking a different route, sources have said. The company may sell between 50 million and 55 million shares in the offering, with pricing between $28 and $30 per share, raising anywhere between $1.4 billion and $1.65 billion in the offering. That would value the company around $15 billion or $16 billion. The sources noted that nothing is concrete, and both the initial float and pricing are subject to change.

In terms of the timing of the IPO, Santosh Rao, a senior analyst at Greencrest Capital Management, which specializes in private company analysis, notes that it usually takes at least 30 to 60 days of discussions before a deal can be reached with the SEC and therefore the IPO should happen at the end of the year or early next year based on the assumption that the confidential S-1 was filed in September as reported. However, given that it was stealth filing, he cautions that the filing could have taken place three months before that without any obligations for the company to reveal the action until now.

Rao said a broker from the company's network of large investors in Twitter recently was trying to arrange a private secondary market purchasing transaction on Twitter shares at the request of a big buyer who "really wanted to arrange one" and was willing to pay as up to $28 for each share. "But there was no seller," Rao said. "No one wants to sell because they think the share price is going up."

The company declined to comment on its initial public offering plans.

Details surrounding the upcoming offering are sparse, as the company filed the S-1 document to the SEC, using the JOBS Act. The JOBS Act was designed to allow companies the possibility of going public without the initial scrutiny of investors, provided the company has less than $1 billion in revenue.

Rao said the network of Twitter investors Greencrest is plugged into include early investors in Twitter, and others who have not been subject to the extremely tight company restrictions on selling shares in the pre-IPO period applicable to employees and management.

In talking to venture capitalists and big owners of the stock with close knowledge of the IPO negotiations, Rao said he's heard of more evidence that company is doing well and that numbers for current revenue streams should look to be "pretty good" when the contents of the S-1 filing are revealed.

Rao added that the company has many options going forward for increasing revenue growth and that there is no question one of the biggest things going for them is that they're already experts in mobile monetization: "they started from mobile and all their revenue and advertising models are based on mobile," he commented.

Sources have speculated that Twitter's revenue could be as much as $750 million for fiscal 2013.

Research firm e-Marketer has estimated that Twitter's 2013 ad revenue will be approximately $582.8 million, before nearing in on $1 billion in advertising revenue in 2014. According to the research firm, more than half, 53%, of Twitter's advertising revenue will come from mobile this year.

--Written by Chris Ciaccia and Andrea Tse in New York

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