Blow for Nasdaq as Twitter chooses NYSE for listing

TWITTER revealed on Tuesday a tripling in quarterly losses as it prepares to list on the New York Stock Exchange (NYSE) in one of the year’s most eagerly awaited initial public offerings (IPOs).

The online messaging service’s decision to go with the older exchange dealt a blow to the techheavy Nasdaq, which bungled Facebook’s offering last year. Twitter was expected to kick off its investor road show on October 28, where it would pitch its offering to Wall Street before shares started trading in the middle of next month, two sources familiar with the situation said on Tuesday.

In an amended IPO filing on Tuesday, the eight-year-old company showed that it sustained its recent pace of revenue and user expansion in the quarter ended September 30, even though its losses continued to widen.

Among the biggest winners of a successful IPO would be cofounder Evan Williams, with a 12% stake. Rizvi Traverse, run by Hollywood and Silicon Valley financier Suhail Rizvi, and its affiliates hold 17.6%, as the largest institutional holder. JPMorgan Chase’s alternative asset management arm holds another 10.3%, the filing revealed for the first time. CEO Dick Costolo, an early angel investor, owns 1.6%.

Mr Rizvi and his investors, who obtained their shares with the help of Silicon Valley investor Chris Sacca, paid more than $1bn for their stake, Reuters reported this month.

Other major stakeholders include Spark Capital and Benchmark Capital, which own 6.8% and 6.6% of the company, respectively. Union Square Ventures owns 5.9%. Twitter’s debut will be the culmination of a journey from side project to sociocultural phenomenon; one that has become a communications channel for everyone from the Pope to President Barack Obama.

Twitter more than doubled its third-quarter revenue to $168.6m, but net losses widened to $64.6m in the September quarter compared with $21.6m a year earlier.

And in the three months ended September, Twitter grew its monthly active users 39% to 231.7million on average. That figure was up from about 218-million when the company first disclosed its IPO filing on October 3.

Those losses were driven partly by a 158% surge in sales and marketing spending, as the company ramped up its sales forces in offices around the world to push its advertising platform.

Sales and marketing costs for the company rose to $61.2m from $23.7m a year earlier.

Twitter said its revenue was increasingly coming from mobile devices, the preferred way for most users to log on.

In the three months to the end of September, more than 70% of advertising revenue came from phones and tablets, versus 65% in the prior quarter.