In tweet, Twitter announces highly anticipated tech IPO
By Glenn Chapman, AFPSAN FRANCISCO--Twitter announced Thursday, in a tweet, that it has submitted papers for the most hotly anticipated stock offering in the tech sector since Facebook's last year.
September 14, 2013, 12:01 am TWN
“We've confidentially submitted an S-1 to the SEC for a planned IPO. This Tweet does not constitute an offer of any securities for sale,” the company tweeted.
Moments later, in typically breezy style, the company tweeted a picture of its staffers, and said: “Now, back to work.”
Twitter's market value has been estimated around US$10 billion based on early venture capital investments, but the initial public offering (IPO) is likely to bring a higher amount.
“We expect @Twitter to price #IPO conservatively at 20-30x revenue, or US$15 billion, with about US$500 million in revenue,” said a tweet from the private company research firm PrivCo.
The firm added in another tweet: “Unlike @FB (Facebook) which waited too long to IPO (growth rate decelerated) Twitter will IPO at just the right inflection point.”
Lou Kerner at the Social Internet Fund, said he expects a big reaction from investors.
“Given Twitter's significant growth, and the market's love affair with social media, the Twitter IPO is posed to be a home run,” he said in an email.
Twitter has become one of the fastest-growing and most influential social media services, used widely by celebrities, journalists, politicians and others.
The company said earlier this year it had “well over 200 million” active users, although some analysts place figure much higher.
Twitter said this week it was moving deeper into mobile advertising with the purchase of MoPub, a startup focusing on mobile ad exchanges.
The acquisition was announced late Monday. It was estimated to be worth some US$350 million, according to the technology news site TechCrunch.
The fast-growing social network is expected to earn US$582.8 million globally in ad revenue this year and nearly US$1 billion next year, according to industry tracker eMarketer.
The San Francisco company provided no details on the IPO dates or pricing.
It is taking advantage of a rule adopted last year by the Securities and Exchange Commission, which allows “emerging growth” companies with revenues of less than a billion to keep financial details confidential until they get closer to the IPO.
Under those rules, Twitter can keep its financials private until 21 days prior to its presentation to investors, known as a “road show.”
But Trip Chowdhry, analyst at Global Equities Research, said Twitter is undermining confidence by keeping its finances private.
“The idea of doing a confidential IPO undermines the credibility of the Twitter IPO,” he told AFP.
“If they are not transparent, it is that they have something to hide; we know nothing of how their company has been going for the last two years.”