Twitter Inc. (TWTR) kicked off the roadshow for its initial public offering yesterday at a meeting room in the Philadelphia Ritz-Carlton with capacity for about 25 people, a low-key affair compared with Facebook Inc.’s, where attendees queued through a hotel lobby and out the door.
Chief Executive Officer Dick Costolo and Chief Financial Officer Mike Gupta were seen meeting money managers at the invitation-only event, the start of an eight-day marketing tour to stoke appetite for the IPO scheduled to price Nov. 6. Meetings will be held in New York today and tomorrow, with Boston and Chicago later this week, according to a schedule obtained by Bloomberg News.
The kickoff reflected Twitter’s quieter approach to the IPO process, underscored by its decisions to file confidentially and limit private trading of its shares. It also gave executives time to practice their pitch for the IPO -- poised to be the largest for an Internet company since Facebook’s (FB) -- before meeting larger groups.
“Most of the people that went to it said there was absolutely nothing that was any different from what management said in the past,” said Jeff Sica, president and chief investment officer of Sica Wealth Management LLC, who didn’t attend. “There wasn’t any sense of excitement that they’re going to open up any different revenue channels.”
Attendees in Philadelphia arrived at the hotel before 2:45 p.m. and filed into a room where a projector screen and several round tables draped in white could be seen. Coffee and soda were served. A representative for Twitter didn’t respond to a request for comment on the roadshow.
New York Crowd
San Francisco-based Twitter is seeking as much as $1.4 billion in its offering, compared with the $16 billion Facebook raised in its record sale for an Internet company in May 2012, data compiled by Bloomberg show. At the top of the proposed price range, Twitter -- which has yet to post a profit -- would be valued at $10.9 billion.
Twitter’s meetings in New York may draw more of a crowd. On the first day of Facebook’s pre-IPO roadshow at the Sheraton hotel in midtown New York, potential investors waited in a line that snaked through the lobby and around the side of the building for a meeting that started about an hour late.
In the U.S., companies typically spend one to two weeks before an IPO traveling to different cities to drum up demand for their stock by meeting with investors face to face. Investment bankers take orders for shares during the period, which culminates in a final pricing before the shares start trading publicly.
Twitter has emphasized its plans to shrink losses in materials prepared ahead of the roadshow. In an accompanying video, Gupta has said the company, which has lost almost $500 million since it was founded in 2007, has room to “significantly expand” margins.
“Most of the questions are going to be about how they see their growth, because that’s what people are investing in Twitter for,” said Tim Keating, president of Keating Capital Inc. (KIPO), which specializes in pre-IPO financing. “They’re also going to press about mobile users, monetization and, down the line, profitability.” Keating said Twitter’s valuation is high.
Twitter is offering 70 million shares for $17 to $20 each. Companies may raise or lower the final offering terms if final demand falls outside the initial range. Goldman Sachs Group Inc. is leading the offering, working with Morgan Stanley and JPMorgan Chase & Co.
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