10 Things We Have Learned About Twitter From Its Impending IPO
San Francisco-based social media titan Twitter made its confidential IPO S-1 filing public last week, revealing interesting tidbits of information that eager analysts and investors could only guess at previously. S-1 filings are akin to a company’s secret diary; the one your brother always managed to find no matter where you hid it. They divulge heavily guarded secrets and a company’s worst fears. The documents also serve as a self-affirmation of sorts, exhorting perspective investors to buy into the company because, well gosh darn it, they’re good enough. Following are a few interesting things we learned about Twitter last Thursday, in no particular order.
1. Two of the company’s founders are not mentioned in the IPO filing at all. Twitter was co-founded by four people. Of the four, Noah Glass and Biz Stone are conspicuously absent from the document. Evan Williams and Jack Dorsey retain 12 and 5 percent of the company respectively.
2. Twitter’s CEO took a huge pay cut two months ago. He went from $200,000 a year down to a $14,000 annual salary. No explanation was given except that CEO Dick Costello holds $8.4 million in stock awards and $2.9 million in options as of 2012.
3. Twitter is not currently a profitable entity. The company took a $69.3 million loss for the first six months of 2013. Twitter says it will continue to focus on innovation and ways to get users to stick around rather than on short-term operating results.
4. Twitter has over 218 million active users monthly, but only 100 million daily users. That’s up from 85 million at the same time last year. In contrast, Facebook claims more than 1 billion monthly active users
5. Advertising accounts for 87 percent of Twitter’s revenue.
6. The company will sell shares under the ticker TWTR, but has not listed an exchange it plans to list itself on.
7. Twitter is targeting $1 billion to be raised by its IPO. The $1 billion target is appreciably smaller than social titan Facebook’s (NASDAQ: FB) $16 billion offering in May 2012.
8. The company is cashing in on mobile. In the second quarter of this year 65 percent of their advertising revenue was generated from mobile devices.
9. Twitter sees spam as a potentially huge risk. The company notes in its filing that while it’s continuing to fight spam, it expects spammers to keep upping their game as Twitter’s user base grows.
10. A set price for the offering has not been announced. Twitter set an internal price for employees in August at $20.62 a share.
Disclosure: The author has no position in the stocks mentioned in this article, and does not intend to initiate any position in the next 48 hours.
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