Twitter IPO priced below fair valuation: Pro
Twitter's stock valuation appears to be an attempt to avoid a repeat of Facebook's troubled initial public offering, PrivCo CEO Sam Hamadeh said Thursday.
"It's actually far below a fair valuation," he said of Twitter's plans to go public at a price of $17 to $20 a share. That range is "a very attractive price," he said, adding that PrivCo does not expect the final pricing to be that low.
Hamadeh told CNBC's "Fast Money that fair valuation for Twitter shares would be closer to the $30 to $33 range.
But because of technical reasons and its S1 SEC filing, he said, the company probably wouldn't increase its share price much more than 20 percent above $20 to $23.
"Even at that price, we think it's a very attractive and conservative valuation, no question," Hamadeh said. "We think there's no question that Twitter is playing a scarcity playbook the way LinkedIn did a few years ago to great effect, and there's no question that the ghost of the Facebook IPO debut is haunting Goldman, the lead underwriter, and Twitter management here in setting the price and the relatively small float."
(Read more: What's Twitter worth? Shareholder explains)
Twitter is offering 70 million shares, which could raise up to $1.4 billion for the company.
Tim Seymour of EmergingMoney.com said that he took issue with the scarcity issue because stakes of Twitter were already tough to come by and trading in an illiquid market.
"And the other problem I have with what Sam said is, what bankers and what company are going to leave 80 percent of value on the table just so they can have a great IPO? I don't buy it," he said. So, if $33 is the fair value, there's no way they would be coming between $17 and $20. No way."
(Read more: 'Apple's got its mojo back': Strategist)
Other "Fast Money" traders were generally positive on buying Twitter at the IPO.
The company did not announce a date for the offering, but a source close to the matter said the shares were expected to price on Nov. 6, which would mean the stock would likely start trading on Nov. 7.
The stock will list on the New York Stock Exchange under the symbol "TWTR."
(Read more: #TwitterIPO)
"It's like LinkedIn, where the users can monetize their experience," said Brian Kelly of Brian Kelly Capital. "You see a lot of businesses using this. I like Twitter."
Mike Khouw of DASH Financial said he liked that Twitter was valued at less than 10 percent of what Facebook was worth.
"I think there's a great deal of potential here," he said.
Trader disclosure: On Oct. 24, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long AGU; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami's wife, Linda Snow, works at Merck; Karen Finerman is long BAC; Karen Finerman is long C; Karen Finerman is long JPM; Karen Finerman is long GOOG; Karen Finerman is long M; Karen Finerman is long OUTR; Karen Finerman is long BID; Karen Finerman is long SPY; Karen Finerman is long MDY; Brian Kelly is long natural gas; Brian Kelly is long treasuries; Brian Kelly is long Gold; Brian Kelly is short PXD; Brian Kelly is short Brent oil; Brian Kelly is short Borespa; Brian Kelly is short S&P 500; Tim Seymour is long BAC; Tim Seymour is long INTC; Tim Seymour is long TCK; Tim Seymour is long BBY,