Institutional investors who met with Twitter Inc this week say they are optimistic about its initial public offering and see little sign of the irrational exuberance that preceded Facebook Inc's splashy coming-out party in 2012.
On Monday and Tuesday, Twitter Chief Executive Dick Costolo and Chief Financial Officer Mike Gupta met with large fund managers and analysts in New York and on the East Coast to sell them on an IPO that seeks to raise up to US$1.6 billion (S$1.98 billion) for the loss-making social media company.
Closely watched by Wall Street and Silicon Valley, Twitter's relatively conservative offering has differed from Facebook's US$16 billion IPO in a panoply of ways, from its vastly smaller deal size to a decision to list on the New York Stock Exchange over Nasdaq.
"It definitely was different than when (Facebook CEO Mark) Zuckerberg came through ... It's the right kind of buzz," said one fund manager who met with Twitter on Monday.
"With Facebook, the buzz was just stupid," said the manager, who declined to be identified because he was not authorised to speak to the media.
Twitter last week said that it would price its IPO shares at US$17 to US$20 a piece, valuing the online messaging company at up to about US$11 billion. That is less than the US$15 billion that analysts had expected, and far below the US$100 billion valuation that Facebook received in its IPO last May.
However, Facebook had reported an annual profit of US$1 billion and revenue of US$3.7 billion before it went public, whereas Twitter reported a net loss of US$79.4 million on revenue of just US$316.9 million in 2012.
At the upper end of its IPO price range, Twitter would be valuing itself at 20 times trailing 12-month sales currently, and about 17 times at the lower end, according to Reuters'calculations from Twitter's IPO filings. But its outstanding share base could swell by tens of millions of stock as holders exercise options and restricted stock units, inflating the valuation.
In comparison, Facebook trades at about 24 times trailing 12-month sales and LinkedIn Corp at roughly 30 times.