Microblogging site Twitter could launch its flotation on the New York Stock Exchange as early as this week with analysts expecting high demand for shares.
In the most anticipated stock market debut since Facebook, the firm may announce its initial public offering (IPO) price on Wednesday with trading the following day.
No official date has been set but Twitter appears to be on a fast track for its flotation, according to reports.
The company will trade under the “TWTR” symbol and will not follow the path of a large number of technology companies by trading on the Nasdaq.
Twitter will seek to raise up to $1.6bn – one tenth the value of the Facebook IPO – by offering 70 million shares in a price range of $17 to $20 each.
That is a relatively small chunk of Twitter’s capital, and implies a market value between $9.3bn and $11.1bn – a conservative figure compared with some of the private market trades in Twitter so far.
The firm appears to have learned a lesson from Facebook’s problematic IPO in May 2012, that was marked by trading glitches, accusations about secret information and a plunge in the share value for months afterwards.
Lou Kerner, founder of the Social Internet Fund, said: “The Facebook situation last year was a perfect storm of an overheated private market, a fully priced offering, a massive amount of shares brought to market, all compounded by an historical technical glitch.
“That confluence of events is not likely to occur again.”
Analysts say Twitter, unlike Facebook, will not flood the market, and that with demand exceeding supply the price will rise.
The early Twitter investors may not get maximum value right away, but could benefit over time from a rise in the share price.
There is considerable excitement about the IPO because Twitter is “a unique product that no one can replicate,” said Michael Pachter, head of equity research at Wedbush Securities.
Mr Pachter and his colleagues said: “We believe that the market is likely to generate appetite for more than $1bn in stock.
“The simple rules of supply and demand suggest that by limiting the supply of shares offered to the public in its IPO, Twitter will be unable to satisfy demand.”
Twitter has some 232 million active users around the world, but has lost money steadily since 2010, according to IPO documents. The losses amounted to $133m on $422m in revenues in the first nine months of the year.
Twitter makes most of its money from advertising, chiefly in the form of “promoted tweets”.
Meanwhile, the story goes that Jack Dorsey proposed the idea of Twitter to fellow co-founders at a playground in San Francisco.
But journalist Nick Bilton, author of “Hatching Twitter: A True Story of Money, Power, Friendship and Betrayal,” said the history was not quite that simple.
Dorsey was a key member of Twitter’s founders, but it was a collective effort, the New York Times journalist has argued.