Twitter has set a price of $26 for its initial public offering of stock, which means the company's shares can begin trading Thursday on the New York Stock Exchange.
The price values Twitter at more than $18 billion based on its outstanding stock, options and restricted stock that'll be available after the IPO. That's more than Macy's, which has a market capitalization of $17 billion, and Bed Bath & Beyond, which is around $16 billion.
The pricing means the short messaging service will raise $1.8 billion in the offering, before expenses.
Twitter, which has never turned a profit in its 7 years in existence, had originally set a price range of $17 to $20 per share for the IPO, but that was an obvious lowball designed to temper expectations. It was widely expected that the price range would go higher. Back in August, for example, the company priced some of its employee stock options at $20.62, based on an appraisal by an investment firm and it's unlikely to have lost value since.
On Monday, Twitter raised the price range to $23 and $25 per share, signaling an enthusiastic response from prospective investors. The San Francisco-based company is offering 70 million shares in the IPO, plus an option to buy another 10.5 million. It is set to begin trading Thursday morning under the symbol "TWTR."
Twitter's public debut is the most highly-anticipated IPO since Facebook's in May 2012.
But Twitter has valued itself at just a fraction of Facebook and has sought to cool expectations in the months and weeks leading up to the offering. With that, the San Francisco-based company is likely hoping its stock will avoid the fate Facebook's shares, which didn't surpass their IPO price until more than a year after the offering.
Tempering expectations has been a big theme in the weeks leading up to Twitter's IPO. The company has tried to avoid the trouble that plagued Facebook's high-profile IPO nearly 18 months ago. Facebook's public debut was marred by technical glitches on the Nasdaq Stock Exchange in May of 2012. As a result, the Securities and Exchange Commission fined Nasdaq $10 million, the largest ever levied against an exchange. Those problems likely led Twitter to the New York Stock Exchange.
Earlier on Wednesday, Barclays Capital said Twitter had hired it to be its "designated market maker," a critical role when a stock starts trading. A DMM is an experienced trader who supervises the trading of a company's stock on the NYSE. If technical problems arise, the NYSE uses DMMs to bypass electronic trading systems, allowing humans to trade a company's stock. That is not possible on all-electronic stock exchanges such as the Nasdaq.
Twitter got its start 7 years ago, first with Jack Dorsey and then Evan Williams as CEO. Its current chief is Dick Costolo, a former Google executive who once aspired to be a stand-up comedian. On March 21, 2006, Dorsey posted the world's first tweet: "Just setting up my twttr." Noah Glass, who helped create Twitter —but is not mentioned in the company's IPO document — posted the same words just 10 minutes later.
Since then, the social network that lets users send short messages, or "tweets," in 140-character bursts has attracted world leaders, religious icons and celebrities, along with CEOs, businesses and a slew of marketers and self-promoters. Twitter now has more than 230 million users, more than three-quarters of them outside the U.S.