By Angela Moon
NEW YORK Nov 3 Twitter will be the talk of Wall
Street this week when the social media company goes public in
the stock market's most anticipated initial public offering
since 2012's Facebook event.
Twitter is expected to price its IPO on the evening of Nov.
6 and begin trading Nov. 7 on the New York Stock Exchange under
"It's not just about the stock. Twitter's IPO will be a
measure of how much liquidity is out there," said John Rutledge,
chief investment strategist at SAFANAD, a private investment
firm in New York.
Twitter has said it will sell 70 million shares for between
$17 and $20, valuing the online messaging company as much as $11
billion, below the $15 billion that some analysts had been
FACEBOOK'S IPO FATE
The market will be on alert to see if Twitter follows the
fate of last year's botched Facebook Inc IPO: the social
networking company's stock hit the market in May 2012 and was
plagued by allocation problems, trading glitches and a selloff.
The shares did not recover the IPO price until a year later.
Views have been mixed on what investing strategy to take for
Twitter's IPO. According to a Reuters survey of 29
broker-dealers and independent advisers, 23 said they are not
recommending Twitter shares. Only one said he would recommend it
- and only to certain clients. Five others said they would wait
to snap up the stock if it plunges after it begins to trade.
But while retail interest might be low, tech industry
analysts say there is expected to be a good appetite for
Twitter's stock from institutional investors at the current
On Friday, Morningstar joined three other brokerages in
setting price targets for Twitter Inc well above its IPO price
range, suggesting the stock has room to rise at least 30
The Wall Street brokerages set a price target of $26 a
share. Last month, Pivotal Research had set its price target at
$29 a share, SunTrust at $50 and Topeka Capital at $54.
GOV'T SHUTDOWN IMPACT
Another event that will grab investors' attention will be
the Labor Department's release of non-farm payroll figures for
October on Friday. The announcement was delayed by the 16-day
partial U.S. government shutdown in early October. Some market
participants warned that the data could be skewed due to the
"It's hard to have a takeaway for the markets because we're
at a point in time where we have to take all the data with a bit
of a grain of salt. Some of it is old, some may not be affected
by the shutdown yet," said Art Hogan, managing director at
Lazard Capital Markets in New York.
This past Friday, the Institute for Supply Management's
index of national factory activity was not affected by the
government shutdown, showing the best reading since April 2011.
"This was supposed to be a government shutdown-affected
number, and it certainly didn't show that," Hogan said.
For last week, the Dow rose 0.3 percent and the S&P 500
gained 0.1 percent, while the Nasdaq slipped 0.5 percent.
But beyond the factory data, the government shutdown did
appear to dampen consumers' appetite for new cars last month.
Seven of the top eight automakers reporting monthly sales on
Friday missed analysts' expectations.
This week's economic indicators also include factory orders
on Monday, followed by the ISM services index on Tuesday. On
Thursday, third-quarter gross domestic product and weekly
jobless claims will be released. In addition to the unemployment
numbers, U.S. personal income and outlays and the Thomson
Reuters/University of Michigan consumer sentiment index are due
EARNINGS SEASON CONTINUES
Earnings will also be in focus. So far, out of the 74
percent of S&P 500 companies that have reported, 68.5 percent
have topped Wall Street's expectations, above the long-term
average of 63 percent. But just 53.3 percent have topped revenue
forecasts, below the 61 percent average since 2002, Thomson
Reuters data showed.
After the Nasdaq OMX Group Inc closed its second-
largest options market for much of Friday due to a technical
glitch, many investors will be watching whether the operations
will fully resume on Monday.
The Nasdaq Options Market, which accounted for around 8
percent of U.S. options volume last month, was halted at
10:36:57 a.m. EDT (1436 GMT) and remained shut through the rest
of Friday. While the halt had a minimal effect on the options
markets, it was the latest in a series of industry mishaps have
raised concerns about infrastructure.
(Wall St. Weekahead runs every Sunday. Questions or comments
on this one can be sent to angela.moon(at)thomsonreuters.com)