Twitter Raises IPO Price Range, Looks To Sell Shares For $23-$25

Twitter’s roadshow must be going pretty well.

The social network has been pitching its forthcoming initial public offering to institutional investors over the last week-plus and raised the price range for the deal Monday morning according to an updated SEC filing.

Twitter now aims to sell shares for between $23 and $25 apiece, up from an initial range of $17-$20, in a deal expected to make its debut this week.

The company plans to sell 70 million shares, which would raise $1.7 billion at the midpoint of the price range. With just under 545 million shares outstanding after the offering, that price would give Twitter an initial market cap of just over $13 billion.

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In a note last week, Morningstar MORN +0.41% analyst Rick Summer estimated Twitter’s fair value at $26 per share, and that shares could climb to $50 in a bull case. Should the service “become ubiquitous like Facebook FB -1.89%, the investment case is unusually strong,” Summer wrote in his report.

A more skeptical case on Twitter comes from Rapid Ratings, which issued a report last week saying the offering matched 92% of the characteristics of “Bubble-Era IPOs,” a considerably higher figure than either Facebook or LinkedIn LNKD +1.21%.

“Twitter is an earlier-stage company than FB and LinkedIn,” the report says. “In many ways, the Twitter IPO seems more reminiscent of the pre-2000 dot-com ‘Bubble era’ than other recent tech IPOs in 2012 and 2013.”

Shares of LinkedIn have more than doubled since the company’s 2011 and Facebook, which had a rocky debut in May 2012, is one of this year’s best-performing stock and has gained more than 30% from its IPO price despite being cut in half within a few months of the offering.

Twitter shares are expected to begin trading on the New York Stock Exchange Thursday, under the symbol TWTR. A group of executives and founders, including CEO Dick Costolo, Chairman Jack Dorsey and co-founder Evan Williams, will own slightly over 22% of the company post-offering, while a group of institutional investors including Rizvi Traverse Management, JPMorgan, Spark Capital, Benchmark Capital Partners, Union Square Ventures and DST Capital will own approximately 46% of the shares.

Goldman Sachs Group GS +0.24% is the lead underwriter on Twitter’s IPO, followed by Morgan Stanley MS +0.21% and JPMorgan Chase JPM -0.29%.

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The Best IPOs of 2013

On its first day of trading on the Nasdaq, Potbelly closed at $30.68 per share, more than double its opening price of $14 per share and representing a 119% Day 1 pop.It’s been a good year for IPOs: according to data from IPO research firm Renaissance Capital, the US IPO Index offered an average return 30% in the third quarter of 2013. There have been 152 IPOs through the first three quarters of 2013, an activity level on pace with levels not seen since the years of the tech bubble -- and several have had Day 1 pops comparable to, if not greater than Potbelly's. Who falls where on the list? Click through to find out. (Data courtesy of research from IPREO.)