Social media:
Twitter announces its plans for an IPO with a tweet, of course.
SAN FRANCISCO — Twitter took the first official step to becoming a publicly traded company Thursday — and announced the much anticipated news via its own globally popular microblogging service.
“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,” read a tweet from the San Francisco com- pany’s official account. It then tweeted a photo of employees in its headquarters with the message, “Now back to work.”
But the initial public offering filing, a move speculated about for several weeks, means that it will hardly be business as usual for the 7-year-old company, which has 200 million monthly active users.
Details of the offering were not known. The registration documents filed with the Securities and Exchange Com- mission were not posted on the SEC website because Twitter is taking advantage of the Jump- start Our Business Startups, or JOBS Act — federal legislation passed last year. One provision allows companies with less than $1 billion in revenue in its last fiscal year to avoid submitting public documents on such offerings.
Twitter spokesman Jim Prosser said the company had no additional comment. “The Tweet is our comment,” Prosser said in an email.
Twitter could be the most
anticipated and hyped initial public offering since Facebook in May 2012. Twitter also has had more than a year to study the offering of Facebook, which saw its stock price wallow far below the initial $38 per share price until only recently.
Michael Pachter, managing director of equity research for Wedbush Securities, said Twitter may have better timing than Facebook.
“The time is right. Internet stocks are trading at huge valuations right now. I think they are floating shares while the good times are still good,” Pachter said.
Goldman Sachs Group will be the lead underwriter for the initial public offering, according to a person familiar with the matter who asked not to be identified.
Twitter was valued last month at $10.5 billion by GSV Capital Corp., one of its investors, up 5 percent from a May estimate. Facebook, which raised $16 billion last year, has a market value of about $109 billion.
Under CEO Dick Costolo, Twitter has been ramping up its revenues from advertising. Research firm eMarketer estimates that Twitter will make $582.8 million in worldwide ad revenue this year, up from $288.3 million in 2012. By comparison, Facebook had ad revenue of $1.6 billion in the April-throughJune quarter this year. By 2015, Twitter’s annual ad revenue is expected to hit $1.33 billion.
Twitter, which has 1,500 employees, moved into its new headquarters in 2012.