First Take: Twitter pricing could create IPO wave

SAN FRANCISCO — Its founders may not agree on what Twitter is, but investors do: It's a potential IPO gold mine.

The micro-blogging service, based here, today priced shares at $26 each, giving the soon-to-go public company a staggering $18.3 billion valuation.

The pricing underscores high expectations for a service whose revenue is expected to soar to $1.24 billion by 2015 and usher in a wave of consumer-tech public offerings. Twitter could begat Dropbox, which could begat Box, which could begat Square, which ... you get the idea. (The Wall Street Journal reported Wednesday that Square, Jack Dorsey's other company, is eyeing a 2014 IPO date.)

The domino effect of Twitter, in many ways, was aided by recent surges in the stock prices for Facebook and LinkedIn. But Twitter helped itself in a recent investor road show with convincing financial projections based on advertising forecasts. It says more than 70% of its revenue comes from advertising.

The company has come a long way since co-founders Dorsey and Evan Williams famously disagreed on defining Twitter, as reported in the book Hatching Twitter.

And for anyone who doubts Twitter's ability to make enough money to justify its lofty value, consider its handsome payout to a handful of executives.

Twitter's IPO pricing mints at least one paper billionaire and a slew of multimillionaires.

Williams, who sold his start-up Blogger to Google and bankrolled much of the early efforts, stands to rake in more than $1 billion.

If shares double — as some expect, Square CEO Dorsey and Peter Fenton, a general partner at Benchmark Capital — are also in line to become billionaires on paper.