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Twitter has announced that it will be pricing its shares between $17 and $20 to raise up to $1.4 billion. The offering represents about 13 percent of the micro blogging company, thereby valuing it about about $11 billion.
Twitter will offer about 70 million shares to the market, while keeping at least half a billion unsold. 51 percent of the common stock will be held by the social network's upper management, according to the SEC filling.
The pricing is much lower than analysts expectations, thereby indicating that the company wants to avoid a dip in stock price post listing, a problem that Facebook had during its initial days on the stock market.
The world's largest social network's stock price fall to levels less than its initial offering value before it began recovering earlier this year. After opening at $38 per share, the price dipped to about $17.58 over the following months before recovering in full swing later on.
In the filling, Twitter has also warned potential investors that they shouldn't expect good fortunes in the near future. It indicated that it had accumulated a deficit of $483.2m, which is more than its revenues, which grew from $28.3m in 2010 to $316.9m last year.
Twitter expects its revenue growth to slow down since its has reached a saturation point by signing up almost all potential customers in the US.
Earlier this month, Twitter indicated that about 89 percent of its revenue came from advertising, an increase from 85 percent in the previous year.
Despite being much smaller than its rival Facebook, the micro blogging site managed to accomplish something that Facebook is still struggling with. Starting in 2012, a majority of Facebook's users start accessing the social network from their mobile phones, causing its web advertising to take a hit. Twitter on the other hand managed to optimize its mobile advertising model early on, allowing it to perform very well in the mobile sphere.