Twitter greymarket valuation and volumes rise as IPO pricing nears


Twitter is expected to price its IPO later this week, greymarket pegs $22-$23 billion valuation.

After much anticipation, social networking icon Twitter (NYSE:TWTR) is finally expected to price its IPO later this week (November 7), barring any last minute change in plans.

And while the latest version of Twitter’s IPO prospectus still shows a $10-$11 billion post IPO valuation, greymarket traders at brokers such as IG Group and ETX Capital are betting on a much higher result once Twitter actually begins trading. The latest spread at IG has Twitter changing hands at a valuation spread of $21.5-$23.5 billion — more than double the valuation implied even by the high end of Twitter’s suggested pricing range.

We understand from industry sources that Twitter greymarket trading volumes picked up significantly last week, as expected, once Twitter management began its IPO roadshow with investors. As pricing nears this week, volumes should continue to rise.

Twitter earlier surprised investors by choosing the NYSE over Nasdaq for listing its shares. Nasdaq is home to online giants such as Facebook (NASDAQ:FB) and Google (NASDAQ:GOOG). Business-focused social network LinkedIn (NYSE:LNKD) trades on the NYSE.

While most retail forex brokers have decided not to offer Twitter pre-IPO trading, once Twitter prices we expect more brokers to start ‘Trade Twitter’ advertising campaigns, which should speak to the large swath of ‘average’ retail traders who are familiar with the service, and who most probably use Twitter in their day-to-day lives. We saw a very similar phenomenon used last year in the retail FX industry around the Facebook IPO.

Twitter shares are sure to bounce around a lot after pricing, at least for a while, and the ability to easily get in and out of either long or short positions on Twitter will be very appealing to many retail traders.

Stay tuned to LeapRate as we continue to cover the Twitter IPO.

To see the latest version of Twitter’s IPO prospectus click here.

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.

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Twitter greymarket valuation and volumes rise as IPO pricing nears

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