Twitter triples in value during grey market trading

Oliver Smith
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TWITTER has trebled in value on grey market trading in the firm ahead of its expected market debut in November.

The company has hit market valuations of up to $29bn (£17.9bn) based on trading taking place on city firm IG Index’s market.

IG has previously offered grey markets – the price companies are unofficially valued at ahead of a float – for Facebook and Royal Mail. Facebook’s grey market overvalued the company by 20 per cent while the Royal Mail’s undervalued it by 10 per cent.

Over the past week IG has seen trading volumes increasing to around 60 per cent of those seen during the Royal Mail grey market.

“The interest has been steadier (Royal Mail picked up aggressively towards the end) and at this rate it looks likely to be an even livelier market by the time we come to the first trading day,” said IG market commentator Alastair McCaig.

Twitter’s grey market originally valued the social network at $11bn six weeks ago, but trading has now far exceeded this.

“Our price is on the market cap as at the close of business on the day it goes unconditional and at the moment that is between $27.25bn and $29.25bn almost three times the general market perception when they first announced the IPO.

“We have been making a grey market in this from mid-September and it has been predominantly buying until the last three trading days where we have begun to see good two way action,” added McCaig.

Twitter announced its intention to float on 12 September in, appropriately, a tweet: “We’ve confidentially submitted an S-1 to the SEC for a planned IPO. This Tweet does not constitute an offer of any securities for sale.”

This month its filing became public on 4 October, the filing revealed details such as the company’s aim to raise $1bn (£619m) in its float.

Details on the timing and price of Twitter’s offering remain undisclosed.