Twitter to list on the NYSE, post-IPO trajectory highly likely to be similar to Facebook (NASDAQ:FB)
NEW YORK – On Tuesday, Twitter announced their decision to list on the New York Stock Exchange (NYSE:NYX). Analyst’s viewed the decision as a big with for the ‘Big Board’ as what many believe will be the biggest IPO of the year opens the door more internet listings.
With Twitter, the New York Stock Exchange now includes Pandora (NYSE:P), LinkedIn (NYSE:LKND), and Yelp (NYSE:YELP) as internet companies who have chosen to list on the exchange since 2011. While the NASDAQ OMX Group (NASDAQ:NDAQ) scored Facebook (NASDAQ:FB) last year, their reputation has been hurt in recent months by software malfunctions that have disrupted trading. Competition for IPOs is critical for both exchanges, which get about a fifth of revenue from listing fees.
According to Richard Kline, a partner at Goodwin Procter law firm in Menlo Park, California, ‘Companies like to list where other, similar companies are listed. Anybody associated with the offering will get an uplift from it, and next time they meet with a company’s board they can say ‘we won Twitter.’
Twitter also announced in their most recent filing with the Securities and Exchange Commission (SEC) that their revenue more than doubled to $ 168.6 million in the third quarter. It is believed the company will start a roadshow to promote the IPO later this month; however, this could not be confirmed by the company.
In a statement sent via email, the NYSE proclaimed this as a ‘decisive win … we are grateful for Twitter’s confidence in our platform and look forward to partnering with them.’ By choosing to list on the NYSE rather than the NASDAQ, Twitter highlighted the different path that the micro-blogging site has taken compared to Facebook. Facebook chose Morgan Stanley (NYSE:MS) for its listing while Twitter picked Goldman Sachs (NYSE:GS) as the lead underwriter and kept a low profile during the process.
The Twitter offering seeks to raise more than $ 1 billion on a fair value of $ 12.8 billion for the company. The price target for their common stock at IPO was listed at $ 26.20 in regulatory filings submitted to the SEC in August.
According to Dealogic, the 25 technology and Internet IPOs through Sept. 24 had raised about $ 3.84 billion; if the Twitter IPO goes off as planned, it will equal 25 percent of the entire technology and internet IPO mark for the year. While there is much enthusiasm over the listing, investors should also take a closer look at the company’s financials as Twitter post-IPO trajectory is highly likely to be similar to Facebook.