Twitter Makes IPO Filing Public
Twitter’s plans for its IPO are clipping along at a pretty rapid pace. The company is now ready to go on a roadshow of sorts to market itself to potential investors. Less than a month after filing its confidential paperwork with the SEC, Twitter made the S-1 document public on Thursday. Twitter broke the news in a tweet released in the early evening hours.
Our S-1 will be filed publicly with the SEC momentarily. This Tweet does not constitute an offer of any securities for sale.
— Twitter (@twitter) October 3, 2013
The prospectus confirms that the company is looking to raise $1 billion on 472,613,753 shares of common stock. Twitter will trade under the ticker TWTR but has declined to comment on which exchange it will trade. Both the New York Stock Exchange and the Nasdaq are holding their breaths in anticipation of that bit of information. A showy IPO is always good PR and both major markets are vying for Twitter’s listing and the cachet it will undoubtedly bring.
The document made public information that curious analysts and investors have only been guessing at till now. Twitter’s revenue nearly tripled in 2012, to $316.9 million, chiefly pushed by advertising revenue. In the first six months of 2013, the company took a loss of $69.3 million with revenue coming in at $253.6 million.
As for number of users, Twitter says in the document that it has 215 million active users. Of those, 100 million utilize the service daily. Surprisingly, three-quarters of Twitter users are outside of the U.S. The problem here is that only 25 percent of the company’s ad revenues come from foreign advertisers. Twitter mentions this as a potential risk in its S-1 filing. The inability to monetize internationally is concerning in markets like India, where people gain access to the service using basic mobile phones that cut down on options for advertising.
In fact, the company included a whopping 32 pages of inherent risks involved in investing in Twitter. It appears that it has learned a few things from Facebook’s (NASDAQ: FB) IPO last year. Whereas Facebook underwent months of high profile publicity after filing its S-1 last year, Twitter has been secretive until now.
Additionally, Twitter’s filing disclosed that its founders will not have the same level of influence over the company that Zuckerberg does at Facebook, who utilized a dual-class stock structure to enhance his power. Twitter has one class of stock, providing additional shareholders with much more say on what happens at the company. None of the initial founders will hold an operative role in the business. That smacks of democracy and will be refreshing to many potential investors.
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.
Become An Exclusive Member Of Wall Street Insanity