Twitter Prices IPO, Valuing Company at Up to $11 Billion

Filing reveals social media company seeks to raise up to $1.6 billion

Twitter set its initial public offering price range at $17 to $20 per share, putting a value on the company of up to $11 billion, according to documents filed  Thursday with the SEC.

In the IPO, Twitter will raise up $1.61 billion, according to the filing. The social media company will offer 70 million shares when it goes public on the New York Stock Exchange, under the symbol “TWTR.”

Twitter’s underwriters have the option to purchase up to an additional 10.5 million shares from Twitter at the IPO price (minus the underwriting discount). Goldman Sachs is leading the Twitter offering, along with Morgan Stanley and J.P. Morgan. Also underwriting the IPO are BofA Merrill Lynch, Deutsche Bank, Allen & Co. and CODE Advisors.

In the last year, Twitter has grown dramatically but remains unprofitable. For the third quarter, the company reported $168.6 million in revenue, more than twice the year-earlier period, but also disclosed its biggest net loss to date, of $64.6 million.

To increase sales, Twitter has focused in particular on ad partnerships with TV networks, aiming to help them boost viewers for their on-air programming and also tap into “in-tweet” video advertising opportunities on the social service. TV partners include CBS, the NFLESPN, BBC Global News and BBC America, Turner Sports and the NBA, Viacom, Fox Broadcasting, The Weather Channel and A+E Networks.

Twitter’s monthly active user based climbed to an average of 231.7 million for the quarter ended Sept. 30, up 6% from 218.3 million the previous quarter. Of those, Twitter said it estimates less than 5% are “false or spam accounts” although it admits that estimate may be low.

Among risk factors, Twitter says the biggest is that users will lose interest in the 140-character service. “If people do not perceive our products and services to be useful, reliable and trustworthy, we may not be able to attract users or increase the frequency of their engagement with our platform and the ads that we display,” it said.

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