Twitter's Big Day

Twitter is ready for its Wall Street debut. The social media company set the price of its initial public offering at $26 a share on Wednesday evening, raising $1.8 billion and achieving a valuation of $18.1 billion, Vindu Goel reports in The New York Times. Its stock is set to begin trading on Thursday under the ticker symbol TWTR on the New York Stock Exchange. The I.P.O. price, a subject of debate between the board and its underwriters until late on Wednesday afternoon, came in above an already heightened price range, reflecting strong demand for the stock, Mr. Goel reports.

And yet, investors in the stock offering face a number of risks. Attracting and retaining users has become a big challenge for Twitter: The company's slowing user growth has invited unfavorable comparisons with Facebook, the world's largest social network, where about 1.2 billion people used the service at least once a month in the third quarter. Twitter, by contrast, had 232 million monthly users during the same period, up just 14 million, or 6.4 percent, from the previous quarter. That rate is slower than what Facebook had when it was the same size.

Twitter is generating large losses as it competes in a highly uncertain sector of the economy, and that is precisely why investors were eager to get a piece of the I.P.O., DealBook's Peter Eavis writes. Investors are betting that Twitter will become wildly profitable as advertisers pay it increasing amounts of money to reach consumers who use the service. 'The possibilities and opportunities afforded by the platform are limitless,' Dick Costolo, Twitter's chief executive, said in a company presentation to promote the offering. But if history is a guide, the euphoria is unlikely to last, Mr. Eavis writes.

Twitter's stock price, even before its first day of trading, may already reflect most of Wall Street's growth expectations, Mr. Eavis says. 'The company could start trading with a market value of around 11 times its expected 2015 revenue, according to estimates from Sterne Agee. At that multiple, Twitter would already be more expensive than other social companies, like Facebook, Yelp and LinkedIn.'

Twitter's record of losing money does not necessarily mean it will be sheltered from taxes, Victor Fleischer writes in the Standard Deduction column. The company wrote down the value of its tax assets by $42 million, according to the prospectus for its I.P.O. That may be because ownership changes 'are likely to restrict Twitter's ability to use net operating losses under the Internal Revenue Service Code,' Mr. Fleischer writes.

DealBook will be running a live blog of Twitter's first day of trading.

BONUSES PREDICTED TO RISE, UNLESS YOU'RE A BOND TRADER | Financial advisers, asset managers and underwriting investment bankers can expect their 2013 bonuses to rise as much as 15 percent, according to a produced by Johnson Associates to be released on Thursday. Over all, the survey shows, Wall Street employees can expect year-end bonuses to grow 5 to 10 percent on average, the second consecutive year of increases, DealBook's Rachel Abrams reports.

But bonuses for bond traders, who had a rough year because of interest rate instability, could drop by just as much or more. 'The predictions reflect a new reality for Wall Street's biggest banks, whose fixed-income revenues have plummeted amid a choppy bond market,' Ms. Abrams writes.

ON THE AGENDA | Twitter is set to begin trading. Groupon and FireEye report earnings after the market closes. An estimate of gross domestic product in the third quarter is released at 8:30 a.m. Dick Costolo, Twitter's boss, is on CNBC at 9 a.m. and Bloomberg TV at 9:30 a.m.

AN ARGUMENT FOR GOVERNMENT INVOLVEMENT IN HOUSING | 'Congress is debating what to do about Fannie Mae and Freddie Mac, the government-owned mortgage insurance companies that collapsed during the 2008 financial crisis,' Jesse Eisinger of ProPublica writes in his column, The Trade. 'The leading proposals involve getting rid of the Frannies to have private companies create mortgage-backed securities.' But, Mr. Eisinger says, 'there's a good argument that preserving the government's large and active role will make the market safer and more efficient than the overhaul.'

A large government role is unavoidable, Mr. Eisinger writes. And it may be more honest. 'Because the government obligation is inevitable, it ought to be transparent and explicit rather than obscure. Keeping Fannie and Freddie as government operations is the cleanest way to do this.'

DEALBOOK'S COMING CONFERENCE | On Nov. 12, The New York Times will host its second annual DealBook conference in Manhattan. Speakers include Preet Bharara, David Bonderman, Ray Dalio, Barry Diller, Laurence D. Fink, Valerie Jarrett, Daniel S. Loeb, Elon Musk, Ruth Porat and David M. Rubenstein, among others. Don't hesitate to submit questions online.

S.E.C. Has a Word of Caution for Investors in Tech Companies | Mary Jo White, the head of the Securities and Exchange Commission, warned in speech on Wednesday that technology companies with lots of users would not always be able to turn those impressive numbers into actual profit, The Financial Times reports. It so happens that a prominent technology company is set to have its trading debut on Thursday. FINANCIAL TIMES