Twitter has set a relatively modest price range of $17 to $20 per share for its initial public offering (IPO), and says it could raise as much as $1.6bn in the process.
The pricing is relatively conservative considering that Twitter is poised to pull off the year's hottest IPO.
Twitter Inc said in a regulatory filing on Thursday that it will put forth 70m shares in the offering. If all the shares are sold, the underwriters can buy another 10.5m shares.
At the $20 share price, Twitter's market value would be around $12.5bn, roughly one-tenth of Facebook's current valuation.
Twitter's value is based on 625.2m outstanding shares expected after the offering, including restricted stock units and stock options.
The San Francisco-based short-messaging service plans to list its stock under the ticker symbol "TWTR" on the New York Stock Exchange. The shares will likely start trading in early November.
Twitter will begin its IPO "roadshow" as early as Friday, meeting with prospective investors to pitch its stock.
Playing it safe
Some analysts had expected the figure to be as high as $20bn. In August, Twitter priced some of its employee stock options at $20.62, based on an appraisal by an investment firm.
Twitter's caution suggests that the company learned from Facebook's rocky initial public offering last year.
Rather than set expectations too high, Twitter is playing it safe and will very likely raise its price range closer to the IPO, and thus fuel demand.
Facebook's IPO was marred by technical glitches on the Nasdaq Stock Exchange in May of 2012. As a result, the Securities and Exchange Commission fined Nasdaq $10m, the largest ever levied against an exchange.
Those problems likely led Twitter to the NYSE.