Image caption Twitter says it has over 200 million active users but has yet to turn a profit

Twitter has unveiled the price range for its shares when the company lists on the stock exchange.

In a filing on Thursday, Twitter said it planned to sell 70 million shares priced between $17 and $20 (£10 - £12) to raise up to $1.4bn (£865m).

The offering represents 13% of Twitter and values it at as much as $11bn.

Analysts said the valuation, which was less than forecast, indicated the firm wanted to avoid the dip in prices that followed Facebook's listing.

"They're trying to price this for a very strong IPO, ideally creating the conditions for a solid after-market," said Brian Wieser of the Pivotal Research Group.

Facebook's shares were priced initially at $38 per share. The stock soared within hours of its debut to a high of $45 but later slumped.

Some analysts had blamed over pricing of the shares as a reason behind the fall. However, Facebook shares have since recouped most of their losses and are now trading above the listing price.

Analysis A price tag of $11 billion might look a bit steep for a company that is still not profitable - but Twitter's valuation looks conservative compared to some of those it is following onto the market. There had been reports that the company would be seeking a valuation of as much as $16 billion, but at $11 billion that's a multiple of roughly ten times its projected 2014 revenues. Facebook went public at a value of $100 billion - twenty times its 2012 revenue - while LinkedIn launched at an even higher multiple. Perhaps Twitter is right to be cautious - after all, its business model is still fairly opaque, even though there are promising signs that it is working out clever ways of serving advertisers. In any case the founder Ev Williams, who will now be a billionaire, can be pretty satisfied. A new book, Hatching Twitter, reveals that he turned down an offer from Yahoo to buy the company when it was still a fledgling. The price tag back in 2007? Just $12 million.

Earnings worries

Twitter's share sale on the New York Stock Exchange will make it the biggest internet company to go public after Facebook.

The microblogging site has seen steady growth since its launch seven years ago.

According to its IPO documents, it now has 218 million monthly users and 500 million tweets are sent a day.

However, all those users and tweets have not yet resulted in a profit. Twitter made a loss of $69m in the first six months of 2013, on revenues of $254m.

Some analysts said that while the lower-than-expected pricing may help its share prices in the days after the listing, in the long run investors would still need to see the firm make profits.

"The fact that the valuation is lower than expectations, I think was smart by the underwriters. I think it will help the pop," said Michael Yoshikami of Destinational Wealth Management.

"But in the end, even for $11bn, the question is can they come up with earnings to substantiate that number? And it's unclear that they're going to be able to do that."

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Advertising

Almost 85% of Twitter's revenue currently comes from advertising on its site.

There are three main ways for a company or an individual to advertise on Twitter: by promoting a tweet that will appear in people's timelines, promoting a whole account, or promoting a trend.

Twitter tends to charge its advertisers according to the amount of interaction their content generates.

Some analysts say the company has showing strong signs of growth, with revenue rising from just $28m in 2010 to $317m by the end of 2012.

One research firm, eMarketer, has even estimated that Twitter's revenues from advertising sales will increase by more than 100% by the end of this year.