Twitter boosts IPO range amid strong investor demand

Twitter raised the top end of the price range for its initial public offering by 25 percent and will close its books a day early, signaling strong demand for the most closely watched Silicon Valley debut since Facebook last year.

Amid a red-hot market for IPOs and soaring equity markets, Twitter raised its price range to $23 to $25 per share on Monday, from a previous $17 to $20.

The microblogging network, which has yet to turn a profit, kept the size of the offering at 70 million shares. That means it will raise up to $2 billion if the overallotment option of 10.5 million shares is exercised.

The new pricing would value the company at up to $13.6 billion, or about 12.5 to 13.6 times forecast 2014 revenue of $1 billion, according to eMarketer. Both Facebook Inc and LinkedIn Corp trade at about 12 times forecast 2014 revenue.
Several equity research analysts said they expect Twitter shares to rise after they begin trading, with some setting their one-year price target as high as $52.

"We would participate within the $23-$25 range, albeit, simple math would dictate that management should price at the bottom-end of the new range," BTIG's Richard Greenfield said in a note Monday after the price was raised.

Twitter's IPO is fully subscribed, meaning it has attracted more than enough investor interest, according to a source familiar with the offering.

The company plans to close the books on the IPO a day earlier than scheduled, on Tuesday at 12 p.m. EST (1700 GMT), because of strong demand, according to two sources with knowledge of the process.

The IPO is set to price on Wednesday, with shares to begin trading on the New York Stock Exchange on Thursday.

Twitter also said Monday it had received a letter from International Business Machines Corp alleging Twitter infringed at least three U.S. patents held by IBM.