Twitter prices above range at $26 in anticipated IPO

By Olivia Oran

REUTERS - Twitter Inc priced its initial public offering above its expected range to raise more than $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 expected range of $23 to $25, which had already 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.

Some analysts said they expect shares of Twitter to experience a small pop during the first day of trading. Twelve-month price targets on the stock range from $29 to $54.

David Menlow, president of research firm IPO Financial, said it's unlikely that Twitter will see shares soar initially but a smaller size pop is possible.

"I think you could see shares rise 10 percent but there are still a lot of naysayers out there who think the stock is overvalued," he said.

Twitter's public float comes 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.

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.

(Reporting by Olivia Oran; Editing by Bernard Orr)