So how much are Twitter’s privately held shares currently trading for? As high as $US30 and as low as $US16, insiders say.
The New York Times noted that Twitter’s own employees were taken by surprise at yesterday’s news the company was going public. It also reported what price per share Twitter was trading at in private “secondary” markets that only insiders have access to:
Firsthand Tech Value Fund has bought more than one million Twitter shares on the secondary market, acquiring them at an average cost of $US17 a share, which the portfolio manager Kevin Landis said valued Twitter at around $US9 billion. It most recently bought shares earlier this year for about $US16.50 a share.
Michael Pachter, an analyst at WedBush Securities, said Twitter is now valued at $US15 billion to $US16 billion based on buying in the private market.
“Over the last couple of months, shares in the secondary market have risen to between $US20 and $US30. That’s what the private market values it right now, not that investors have any information, but that’s what they are willing to pay.”
Goldman Sachs is leading the underwriting, JPMorgan Chase and Morgan Stanley will also likely have a role.
Business Insider noted yesterday that a $20 billion valuation of the shares would put Twitter at about 17 times revenues — which seems steep but puts it right where Facebook and LinkedIn are trading.