NEW YORK (TheStreet) - By setting the pricing of its initial public offering below some analysts' forecasts, Twitter may avoid the pandemonium that undermined Facebook's (FB) blockbuster May 2012 listing.
Twitter said in a Thursday filing it will sell 70 million shares at an initial pricing range of between $17 and $20 a share.
The over 230 million user-strong micro-blogging site will attempt to offer up to $1.4 billion in stock and will also have the ability to sell an additional 10.5 million shares. Overall, the listing will value Twitter at $10.9 billion using the high end of the firm's range and a total of 544.7 million shares.
Twitter's initial pricing terms may be a comfort to those who worry the offering could suffer from problems with pricing and supply that plagued Facebook's $16 billion May 2012 IPO.
In that listing, Facebook and its bankers continually increased the price and supply of the company's stock to meet institutional and retail investor demand. In the end, Facebook sold a record amount of stock for a tech firm, in an offering that valued the social network at $100 billion.
Scott Sweet, a managing director at IPO Boutique, said in a Friday telephone interview he was relieved by Twitter's offering size and pricing. That may allow a better experience for retail investors seeking to get ahold of Twitter shares, after many ordinary investors were saddled with losses from Facebook's offering until a recent upswing in the firm's share price.
"I think retail will participate in Twitter's offering and demand will be extreme," Sweet said in reaction to initial pricing terms disclosed on Thursday. "There won't be the pandemonium that there was for the Facebook offering," Sweet said.