TechCrunch reported that at US$26, the proceeds of the sales of 70 million shares of common stock will net it $1.82 billion, translating to a valuation of $14.16 billion based on 545 million non-diluted shares or a maximum of approximately $18.1 billion based on 705 million fully diluted shares.
Using those numbers, Twitter co-founder Evan Williams owns a 10.4% stake not including options, which is worth US$1.48B. Meanwhile fellow co-founder Jack Dorsey’s stake is worth $609M and investor Peter Fenton’s clocks in at $820M. Twitter CEO Dick Costolo’s slice sits at $199M. By far the largest stake is held by Rizvi Traverse which holds 16% valued at $2.21B. Union Square Ventures is set to benefit with a $723.8M stake.
Unlike Facebook, which has been successful recently with its advertising initiatives, Twitter has lost more than US$440 million since 2010 and may struggle to convince investors of its profitability.
The company said however that with 232 million users worldwide, it is expected to be able to reach profitability by delivering ads in the form of promoted tweets and from its data analytics.
“Twitter’s IPO is very well timed and should be a very good investment," said Joe McCormack is the CEO of Adquant, a social media advertising company.
"Twitter has a strong mobile presence at a time when mobile advertising marketing is starting to grow as a rapid pace.
"Twitter is strong with the younger demographics at a time when TV is losing its grip on advertising to the cool crowd. Big brands are very interested in Twitter’s users, and performance marketers will be able to capitalize on the real-time advertising that sponsored tweets provide. Twitter will also have the benefit of learning from past social network IPOs like LinkedIn and Facebook.
"Privacy issues are a big concern that will take away focus and resources from the main objective. And, for a public company, the main goal should obviously be to drive the maximum value and meet or beat market expectations.”