Priced at $26 per share, Twitter to raise $1.82B at market cap of $14.2B

Mom and Dad, I’m sorry. Against my better judgment, I’m betting your Christmas presents on the Twitter IPO. Twitter starts trading on the NYSE today under the ticker symbol TWTR and is priced at $26 per share. Twitter will raise $1.82B by selling 70M shares, which translates to a market cap of $14.2B. Looking purely at the numbers that show Twitter is losing money to the tune of $134M annually, it doesn’t quite make sense as a buy. However, I was reminded earlier this year that markets aren’t driven by logical investment decisions based on data, they are driven by hype.

Still, Twitter’s success as a company is going to come down to its ability to leverage data gathered from its users and flood their timeline’s with ads. Neither of those two things are going to be appealing to their 232M active monthly users. Keep in mind, there are already 883M people registered to use Twitter, but only about 25% of them use it on a monthly basis. 651M users have already abandoned Twitter and I can’t believe that adding advertisements and collecting user’s data is going to help. Another study indicated that 36% of people who sign up for Twitter don’t use it after they register. In contrast, that number is only 7% for Facebook.

Despite investor’s belief that the share price of Twitter is going to jump from $26 at open to $43.60 at close today, I may have just talked myself out of buying Twitter for the long term.

Follow me on Twitter @Aaron_Kraus and let me know what your plans are for the Twitter IPO.