Twitter files for "secret" IPO

Written by Edward Chester

September 13, 2013 | 16:41

Tags: #initial-public-offering #ipo

Companies: #twitter

Twitter has filed for an initial public offering (IPO) with the SEC, finally setting in motion the move to it being a publicly traded company.

The news was, of course, revealed via the company's Twitter feed which stated, "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 confidential part of the tweet refers to the fact that this is a so called "secret" IPO whereby Twitter isn't obliged at this stage to release full financial reports, something which any company with revenues lower than $1 billion is allowed to do. Twitter will eventually have to release its financials but not until three weeks before they start marketing the public offering in what is known as a road show.

Twitter's IPO will be among the most anticipated since that of rival social network, Facebook, some 18 months ago. Facebook's $100 billion IPO was marred by trading glitches and investor doubts that the social network could continue to grow its revenues, particularly on mobile devices. However, the company's value was considerably more inflated than that of Twitter, suggesting Twitter should be on a more stable footing.

Twitter is still struggling to make significant money, however, with revenue last year of $350million, compared to Facebook's $1.81 billion in Q2 2013 alone. Similarly Twitter still hasn't gained quite the traction of Facebook with around 200 million users compared to well over 1 billion for Facebook.

Nate Elliott, an analyst at Forrester Research, has stated that "Marketers aren't yet fully satisfied with the results they're achieving on Twitter, and the company still has to improve its ad targeting and find additional ad formats to sell."

However he went on to point out that the IPO could give them the fuel needed to grow that number, along with its revenues.
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