Business
Twitter prices above range to raise at least $1.8 billion
NEW YORK – Twitter Inc priced its initial public offering above its expected range to raise at least $1.8 billion, in a sign of strong investor demand for the most highly anticipated U.S. public float since Facebook Inc.
The microblogging network priced 70 million shares at $26, above the targeted range of $23 to $25, which had been raised once before.
The IPO values Twitter at $14.1 billion, with the potential to reach $14.4 billion if underwriters exercise an over-allotment option, as they are widely expected to.
If the full overallotment is exercised, Twitter could raise $2.1 billion, making it the second largest Internet offering in the U.S. behind Facebook’s $16 billion IPO last year and ahead of Google Inc’s 2004 IPO, according to Thomson Reuters data.
The focus now turns to how Twitter stock will fare on Thursday. Some analysts said they expect shares to experience a small pop during the first day. Twelve-month price targets on the stock range from $29 to $54.
Brian Wieser, an analyst at Pivotal Research Group who valued Twitter this week at $29 a share, said the stock appears to have strong institutional investor support and could easily close over $30 a share on its first day.
But he warned that trading could be volatile, given that Wall Street has struggled to value an unorthodox social media company with a newfangled business model.
“There’s still so much uncertainty and it’s so difficult to even identify how big the opportunity is,” Wieser said. “Twitter will make Netflix look like General Electric as a bellwether of stability.”
Investor enthusiasm for Twitter, which boasts 230 million users including heads of state and celebrities, is strong even though the microblogging network has never turned a profit.
Moshe Cohen, a professor at Columbia Business School in New York, said pressure on the company could quickly mount if shares lose steam out of the gate.
“Twitter, as a company with no expectations of making profits for several years, needs its investors to have faith,” Cohen said. “If that stock starts to show some negative momentum from the beginning, it could last for a while.”
Twitter, however, is listing amid the strongest market for U.S. IPOs since 2007, as equity markets soared and uncertainty around the U.S. debt ceiling has largely subsided for now.
A number of IPOs have doubled on their first day of trading, including Container Store Group, restaurant chain Potbelly Corp and software company Benefitfocus Inc.
Twitter hiked its target IPO price on Monday from an initial range of $17 to $20. All of the proceeds from the IPO will go directly to the company, with no insider selling taking place.
Goldman Sachs Group Inc, which led the Twitter IPO, tops the list of U.S. technology bookrunners this year with an 18.3 percent market share, up from 11 percent a year ago when it ranked fifth, according to Thomson Reuters data.
Morgan Stanley and JPMorgan Chase & Co also led the IPO.
AVOIDING FACEBOOK’S MISTAKES
Twitter has been focused on avoiding many of the pitfalls that plagued Facebook during its $16 billion IPO last May. The company priced shares more conservatively than Facebook did and chose to list on the New York Stock Exchange rather than the Nasdaq.
Facebook had increased both the number of shares and the price range just before its public debut, which contributed to a sustained decline in its share price. The shares took more than a year to recover to the $38 IPO price.
“Twitter did a good job putting together its message,” said Tom Taulli, an independent IPO expert. “It wasn’t about distractions, it was about having a great property and brand and a focus on the business…that wasn’t necessarily the message when Facebook came out.”
The high level of interest stoked by Twitter’s road show spurred speculation in recent days that its bankers could raise the price again significantly higher than $25, but they ultimately did not.
“I’m glad they didn’t take it up higher, as speculated,” said Suntrust Robinson Humphries analyst Robert Peck. “It still provides enough upside for investors and provides a nice contrast to Facebook.”
CHALLENGES REMAIN
Despite Twitter’s successful IPO, some analysts have expressed concerns that Twitter’s valuation is dependent on sustained user growth and a maturing advertising business – two factors that may never be realized.
Although the company has close to a quarter-billion-users, it lacks the ubiquity of Facebook or the “stickiness” factor that keeps people checking the No. 1 social network on a daily basis. A Reuters-Ipsos poll last month showed that 36 percent of people who signed up for a Twitter account say they do not use it.
Twitter, which has extensively courted large brand marketers, still generates relatively little revenue per user compared with Facebook, while the majority of its users are located outside the U.S. in countries such as Indonesia or Brazil, which are less lucrative digital advertising markets.
During its road show over the past week, Twitter executives had assured investors that they plan to wring more money out of its international user base and smaller businesses by expanding its self-serve advertising products and opening offices abroad.
But analysts say the company could encounter a slew of regulatory and policy hurdles in foreign countries as it expands.
Twitter said last month that its third-quarter revenue more than doubled to $168.6 million, but net losses widened to $64.6 million from $21.6 million a year earlier as costs ballooned.
Aside from aggressively growing its overseas sales presence, Twitter’s expenditures will likely continue to rise.
Twitter disclosed Monday that it had received a letter from International Business Machines Corp accusing the social media company of infringing on at least three U.S. patents. Twitter’s well-known intellectual property vulnerabilities could force the company to invest heavily in expanding its patent portfolio, similar to what Facebook has done since going public.
Twitter is set to trade on the New York Stock Exchange on Thursday under the ticker TWTR.
– REUTERS
The Office of the Auditor-General of the Federation has uncovered financial irregularities amounting to ₦514 billion in the 2021 operations of the Nigerian National Petroleum Company Limited (NNPC Ltd).
The revelations were contained in a comprehensive audit report highlighting non-compliance and internal control weaknesses within Ministries, Departments, and Agencies (MDAs) during the 2021 financial year.
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Breakdown of Infractions
The audit detailed four major financial discrepancies within NNPCL:
“Irregular Deductions: A total of ₦343.64 billion was deducted from domestic crude oil sales at source without proper documentation.
“Sinking Fund Deposits: ₦83.66 billion, categorized as miscellaneous income, was retained in a sinking fund account.
“Unauthorised Refinery Deductions: ₦82.95 billion was deducted from federation revenue purportedly for refinery rehabilitation.
“Unsubstantiated Payments: ₦3.75 billion was flagged for transactions related to petrol sales that lacked proper verification.
The Auditor-General’s report stated that these financial activities violated the 1999 Constitution and the Financial Regulations Act of 2009, underscoring significant lapses in compliance with statutory guidelines.
According to the report, NNPCL generated ₦484.73 billion from domestic crude oil sales in March and May 2021.
However, ₦343.64 billion was deducted for various purposes, including “Value Shortfall,” “Strategic Stock Holding Cost,” and “Pipeline Maintenance.”
The deductions were made unilaterally by NNPCL without adequate documentation or justification.
Additionally, the report flagged ₦50 billion of the net payable amount for May 2021 as unaccounted for, creating a significant gap in the federation’s revenue.
“Audit observed from the review of NNPC SAP payment record for March and May 2021 payments that the sum of ₦484.73bn was the gross amount generated for the sale of domestic crude for the months of March and May 2021.
“The sum of ₦343.64bn from the gross amount was unilaterally deducted from the gross domestic crude sales as NNPC Value shortfall, Strategic Stock Holding Cost, Crude Oil and Products Pipeline Losses, as well as the pipelines maintenance and management costs.
“The details of each of the cost components deducted were not provided for audit review. Hence, the reasons for the deductions could not be justified by the management.”
On the unremitted ₦50 billion from May 2021, the report noted: “In the month of May, the net payable that could have been remitted ought to have been ₦127.075bn, but only the sum of ₦77.075bn was remitted, leaving an unremitted balance of N50bn to the Federation Account, which has remained unaccounted for.”
The report attributed these anomalies to weaknesses in NNPCL’s internal control systems, warning of the risks they pose to public funds.
It read, “The above anomalies could be attributed to weaknesses in the internal control system at NNPC, now NNPC Ltd. This is a potential loss of Federation revenue, diversion of public funds, or misapplication or misappropriation of funds.”
The success of the maiden edition of the Lagos Shopping Festival (LSF), Africa’s first 72-hour non-stop commerce and entertainment event has been credited to the Governor of Lagos State, Babajide Sanwo-Olu.
This is the view of Managing Director/Chief Strategist of Chain Reactions Africa Ltd, Israel Jaiye Opayemi, one of the main organisers of the event.
According to Opayemi, though Chain Reactions Africa conceptualised the event, the festival could be rightly described as the Governor’s baby and owes its success to his leadership. “Firstly, the Lagos Shopping Festival could not have come to fruition if the Governor did not buy into our audacious plan when we first presented the idea to him during the Covid-19 pandemic in 2020. Secondly, it was the Governor’s exemplary leadership of the project as its Chief Marketing Officer which attracted the buy-in of key sponsors like Zenith Bank, Tolaram Group, First Bank Plc, and Guinness Nigeria Plc,” Opayemi revealed.
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While the duo of Zenith Bank and First Bank provided their bank on wheel platforms for buyers at the Lagos Shopping Festival, they also supported the Vendors with special Point of Sale Machines with which to process payments from buyers. The banks were also seen marketing their diverse banking products to guests within the shopping arena.
For Tolaram, it was a time to support the citizens and give back to society. Guests at the Lagos Shopping Festival were freely given some of the products of the group such as PowerOil, Indomie and Kellogg’s packaged into goodie bags and given out to prospective buyers at the shopping arena. The Children’s Arena was however activated by Indomie with the children entertained by Santa Claus within a well-equipped arena manned by the Indomie Brands team and the Lagos State Safety Marshalls. The children were daily treated to free Indomie meals daily and given various gifts to go home with.
On its part, Guinness Nigeria came through as the real life of the Nigerian party by organizing product sampling activation for the teeming guests at the festival using brands such as Singleton, Johnnie Walker, Ciroc, Don Royale and Captain Morgan to deliver pleasant experiences to guests aside from Guinness and Malta Guinness.
While unveiling the identity of the festival last month, Governor Babajide Sanwo-Olu had thanked the management of Zenith Bank Plc, Tolaram Africa Group, Guinness Nigeria Plc and First Bank of Nigeria for supporting the idea of a Lagos Shopping Festival, describing it as a value addition on the state’s tourism calendar and the overall efforts to grow the State’s GDP. The Governor further said, “I must specially acknowledge your pioneering sponsorship role. It is easy for a corporate sponsor to jump on the sponsorship band wagon of an already established festival and fund it. But you are supporting the maiden edition of this Lagos Shopping Festival with us. The competition is watching you now. Do not build this brand with us and yield the space for the competition to take over. I do hope you would all commit long term to this brilliant initiative.”
On his part, Girish Sharma, CEO Guinness Nigeria Plc, expressed enthusiasm for the initiative. “Lagos is the commercial heartbeat of Nigeria and Africa’s entertainment capital, and the Lagos Shopping Festival captures its essence. We see opportunities in this initiative because it is a creative fusion of commerce and entertainment. This partnership reflects our dedication to fostering economic opportunities and support the nation’s vibrant entertainment industry.”
A first-of-its-kind, the festival was a convergence of commerce and entertainment, bringing together buyers and sellers in the MSME ecosystem, and hordes of fun-seekers who were entertained with thrilling performances by A-list entertainers, including Adekunle Gold, Wande Coal, Teni, Young Jonn, BNXN, Ayo Maff, SB Live and EmmaOMG. The list also included some of Nigeria’s most sought after DJs such as DJ Neptune, DJ YK Mule, DJ Baddo while Gbenga Adeyinka the 1st and Larry J dished out rib-cracking comedy performances.
Held from 23rd to 25th Day of December 2024, at the iconic Mobolaji Johnson Arena, Onikan Stadium, Lagos, the Lagos Shopping Festival saw thousands of fans throng the main venue and select Lagos malls during the three-day period to bag the latest bargains from local and top global brands.
The Nigerian Naira experienced mixed movements in the foreign exchange markets on Monday, as it depreciated to N1,665 per dollar in the parallel market, down from N1,660 per dollar recorded over the weekend.
In contrast, the official exchange rate saw the Naira appreciate to N1,534.56 per dollar, improving slightly from N1,535 per dollar last Friday, according to data released by the Central Bank of Nigeria (CBN).
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This reflects a marginal gain of 44 kobo in the official Nigerian Foreign Exchange Market (NFEM).
As a result, the gap between the parallel market rate and the NFEM rate widened to N130.44 per dollar, compared to the N125 per dollar margin recorded over the weekend.
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