* Intends to sell 70 mln shares priced between $17 and $20
* Seeks to avoid a repeat of Facebook's bungled IPO
* Stock could begin trading as soon as Nov. 7
By Alexei Oreskovic and Gerry Shih
SAN FRANCISCO, Oct 24 (Reuters) - Seeking to avoid a repeatof Facebook Inc's much-maligned public debut, Twitter Inc revealed more modest ambitions, saying its initialoffering would raise up to $1.6 billion and value the company atup to about $11 billion.
The valuation was more conservative than the $15 billionsome analysts had expected for the social media phenomenon,potentially attracting investors who might consider themoney-losing company's listing price a better deal, with room torise.
Twitter had signaled for weeks it would price its IPOmodestly to avoid the sort of stock plummet that spoiledFacebook's coming-out party. It said on Thursday it intends tosell 70 million shares between $17 and $20 apiece, raking in upto $1.4 billion for the company.
If underwriters choose to sell an additional allotment of10.5 million shares, the offer could raise as much as $1.6billion.
Twitter's offering will be the most high-profile InternetIPO since Facebook's May 2012 debut, when the social networkgiant's shares fell below their offering price and did notrecover until a year later. Still, the modest pricing doesn'tobscure questions about Twitter's profitability.
"The fact that the valuation is lower than expectations, Ithink was smart by the underwriters. I think it will help thepop," said Michael Yoshikami of Destinational Weath Management.
"But in the end, even for $11 billion, the question is canthey come up with earnings to substantiate that number? And it'sunclear that they're going to be able to do that."
At a roughly $11 billion valuation, Twitter would be worthmore than Yelp Inc and AOL Inc combined, butonly a fraction of tech giants like Google Inc andApple Inc, worth $342 billion and $483 billionrespectively. Facebook's market value is now $128 billion.
Twitter and its underwriters begin a two-week road show towoo investors next Monday in New York, with stops in Boston andthe mid-Atlantic region before touching down in Chicago, SanFrancisco, Los Angeles and Denver, according to a sourcefamiliar with the offering.
"They're trying to price this for a very strong IPO, ideallycreating the conditions for a solid after-market," said PivotalResearch Group's Brian Wieser, who valued the company at $19billion.
The company could choose to raise the price of the offeringduring that period as it gauges interest. Twitter is expected toset a final price on Nov. 6, according to a document reviewed byReuters, suggesting that the stock could begin trading as earlyas Nov. 7.
Sam Hamadeh of PrivCo, a private company research firm, saidTwitter could raise the price range and also the amount ofshares being sold. But, he added: "Raising both the price andthe size was Facebook's fatal mistake."
Twitter's debut will cap seven years of explosive growth foran online messaging service that counts heads of state and majorcelebrities among its 230 million active users - but stilloperates at a loss.
Twitter will sell roughly 13 percent of the company in theIPO and will have 544,696,816 shares outstanding after theoffering. That figure could rise given the exercising ofoptions, restricted stock units and the issuance of shares forcompensation after the IPO.
The company plans to list its stock under the "TWTR" symbolon the New York Stock Exchange.
Among the biggest Twitter shareholders selling in theoffering is Rizvi Traverse, a fund managed by secretiveConnecticut-based investor Suhail Rizvi, who has quietly amasseda 17.9 percent stake in Twitter with the help of Silicon Valleyinvestor Chris Sacca.
Rizvi's stake will fall to 15.6 percent of total sharesoutstanding after the sale. JP Morgan Chase, which obtainedTwitter shares through Rizvi and Sacca, will see its stake fallto 9 percent from 10.3 percent.
Twitter co-founder Evan Williams, the largest individualshareholder, will reduce his stake to 10.4 percent from 12percent, while Chief Executive Dick Costolo will emerge with a1.4 percent stake, compared with 1.6 percent currently.
Co-founder Jack Dorsey will also sell shares, as will earlyventure capital investors Spark Capital, Union Square Venturesand Benchmark Capital.
Because many early shareholders, including Williams,previously sold parts of their stake to other investors likeRizvi, Twitter's relatively fractured ownership structure looksmarkedly different from the likes of Facebook and other techcompanies dominated by their founders.
When Facebook went public last year, founder and chiefexecutive Mark Zuckerberg kept 57 percent of the company'svoting shares, thanks to a scheme that gave him twice the votingpower of ordinary shareholders.
Following Twitter's IPO, Costolo will be under pressure toimprove its money-making ability. The eight-year-old companymore than doubled its third-quarter revenue to $168.6 million,but net losses widened to $64.6 million in the Septemberquarter, it disclosed in a filing earlier this month.
This month, Twitter secured a $1 billion credit line fromits underwriters including Goldman Sachs, Morgan Stanley, JPMorgan, Bank of America Merrill Lynch and Deutsche Bank.
In recent months the company has aggressively introduced anumber of new advertising products, including packages withbroadcasters CBS and ESPN that show ads on TV and Twittersimultaneously for the fall TV season.
Twitter has also sought to deepen its relationships withnews organizations, which provide much of the content shared onthe network. The company said Thursday that it hired NBC Newsdigital executive Vivian Schiller as the head of news.
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