Twitter’s prospectus also offered a look at how it has grown; it reported that it had 218 million average monthly active users in the second quarter, up 44 percent from the same period a year ago. But at the end of December, it said it had about 200 million users, suggesting that growth was slowing.
Its revenue for the first half of this year was $253.6 million, more than double the amount it brought in during the same period last year.
Yet Twitter has been steadily losing money, reporting a net loss of $79 million last year and $69 million for the first six months of 2013, although some analysts said such losses were not unreasonable for a young, fast-growing company
Twitter has not set a price for its offering. When it last set an internal price for employees, in August, it valued the stock at $20.62 a share, suggesting a value at that time of $9.7 billion. That figure is equal to 22 times the sales that the company posted in the 12 months through June. Such a valuation is high, even for a young technology company, analysts say.
But since Twitter has shown growth in advertising sales, investors will value the stock based on their expectations of future revenue and profit.
Facebook’s stock market value is 12 times the sales that analysts expect the company to achieve next year. Some expect Twitter to reach $1 billion in sales next year. If the company were to trade at 12 times that estimate, it would be worth $12 billion. Some analysts will probably argue that Twitter is growing faster and therefore deserves to trade at a higher multiple of sales, which could push up Twitter’s stock market value.