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Price revision values Twitter at up to $13.6b

CEO Dick Costolo has been on the road to promote Twitter’s IPO.

Eduardo Munoz/Reuters

CEO Dick Costolo has been on the road to promote Twitter’s IPO.

NEW YORK — Twitter increased the price of shares in its initial public offering by as much as 25 percent Monday, putting it on track to raise $1.75 billion amid brisk demand.

The microblogging site is offering 70 million shares for $23 to $25 each, a regulatory filing shows, indicating a market value of as much as $13.6 billion. Earlier, Twitter had proposed selling shares for $17 to $20 apiece.

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‘‘This number is still a reasonable and doable valuation, and I don’t think it’s going to turn people off,’’ said Santosh Rao, an analyst at Greencrest Capital Management LLC. ‘‘We’ve seen this before, where companies start off with a low number to get people interested, and then work higher. The demand is there as this is the last of the big three social networks to go public.’’

Twitter attracted more than enough interest to sell all shares in its IPO before bankers started officially taking orders for them, people with knowledge of the matter have said. Chief executive Dick Costolo has been traveling to major US cities to make the case that the unprofitable company needs to spend to improve its advertising products, expand its user base, and enhance its infrastructure.

At the top of the range, San Francisco-based Twitter would be valued at 11.8 times estimated sales in 2014 of $1.15 billion, up from about 9.5 times in the initial terms, according to analyst projections compiled by Bloomberg. That compares with Facebook Inc.’s 11.5 times sales and LinkedIn Corp.’s 12.2 times.

Twitter will have 544.7 million shares of common stock outstanding after the IPO. Including restricted stock and options, Twitter will have about 694.8 million shares outstanding. By that measure, at the top end of the range Twitter would be valued at $17.4 billion.

The company has so far been conservative in its pricing and in its IPO process, choosing to file confidentially with the Securities and Exchange Commission before making its prospectus public. By raising the price, Twitter is giving in to demand while seeking to avoid a market debut like that of Facebook last year.

As analysts and investors pored over its prospectus, Facebook raised the price of its offering and ended up in a range that exceeded market demand, causing the stock to drop below the initial price and take more than a year to recover.

Twitter also disclosed IBM Corp. sent a letter ‘‘alleging that we infringe on at least three US patents held by IBM, and inviting us to negotiate,” according to the filing. The patents relate to a networking technique based on common contacts, a way to show ads without interfering with an interactive site, and using interconnected computers to reduce Web traffic.

Twitter is set to price its shares Wednesday and begin trading under the symbol TWTR on the New York Stock Exchange the next day.

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