Twitter's post-IPO valuation projected at over $20 bn

Twitter Inc's user growth has slowed even as it showed no sign of turning a profit, though that may not stop the microblogging service's $12.8-billion valuation from rising.

According to fund managers, the $12.8 billion figure has been arrived at from the fair value that Twitter put on its shares in an IPO filing last week.

Reuters reported, citing Ironfire Capital LLC and Gamco Investors Inc (GBL), the San Francisco-based company could be worth $15 billion to $20 billion once it started trading.

Those targets are based on expectations of increasing revenue at the microblogging site, with its global expansion and drawing advertising dollars from companies seeking access to its 200 plus million monthly active users.

Twitter has more than doubled revenue annually with companies advertising on the service, the filing showed.

At $12.8 billion, the valuation of the company would be around 28.6 times revenue of about $448 million over the past 12 months.

Facebook traded at close to 20 times sales while LinkedIn Corp fetched about 21 times sales.

According to analysts, users who accessed the service from mobile devices were critical to the projected growth.

Around 75 per cent of Twitter's most active users accessed the service from hand-held devices in the three months through June, increasing from 66 per cent a year earlier, according to the company.

Over 65 per cent of advertising revenue came from the devices.

Twitter plans to offer one class of stock, with one vote per share, but the co-founders would not hold any super majority voting rights, according to Charley Moore, co-founder and chairman of Rocket Lawyer, an online legal service firm in San Francisco, sfgate.com reported.

Co-founder Evan Williams with 12 per cent of the shares would be the largest shareholder, followed by 6.7 per cent per cent owned by board member Peter Fenton, general partner of venture capital firm Benchmark Capital, which holds a 5-per cent stake.

Twitter co-founder and creator Jack Dorsey held 4.9 per cent, and CEO Dick Costolo had 1.6 per cent, while other investors including DST Global, Union Square Ventures, Spark Capital and Rizvi Traverse, each holding 5 per cent.

Twitter started off as a side project of podcasting Odeo, founded by Williams, who with Dorsey and Biz Stone spun out the 140-character messaging service into a new company.

Dorsey and Williams exchanged roles down the years heading Twitter, prior to Costolo becoming CEO in 2010.