On Wednesday evening, Twitter announced that the 70 million shares that it set aside for its Initial Public Offering tomorrow would hit Wall Street at $26 per share. That sets the value of the company at $18 billion. The sale of the shares raised 1.8 billion for the social media company, which is considerably more than the $1 billion the company hoped to rake in. Twitter is also reserving 10,500,000 additional shares of common stock for its underwriters.
The price announced today is higher than analysts had expected as recently as Monday, when the rumor was that Twitter's stock price would fall between $23 and $25 per share (up from an originally projected $17 to $20 per share). For comparison, Facebook priced its IPO shares at $38 each. After a very rocky start, Facebook's stock has rebounded and is currently trading at $49 per share. Twitter, surely, is hoping to avoid the fall in stock price that Facebook experienced at its IPO despite Facebook's rebound.
According to Reuters, demand for Twitter's stock seems to currently outstrip supply, but some industry watchers like The Economist argue that the stock is overpriced given Twitter's equivocal responses “about how exactly its advertising machine will be able to generate the billions of dollars of future revenues to justify such a lofty multiple.”
Tomorrow, of course, we'll get a real picture of just how the market will treat Twitter. It will trade under the ticker symbol TWTR on the New York Stock Exchange.