One hundred forty characters could be worth $US1 billion.
Microblogging service Twitter has publicly filed its
paperwork for an initial public offering, announcing its
intention to seek a $US1 billion IPO, though that figure
could be a placeholder before the company later announces the
size and targeted price range for its IPO.
The company also did not announce if it will list on the New
York Stock Exchange or Nasdaq, though it did say it will use
the symbol TWTR.
Evan Williams, Jack Dorsey and Biz Stone originally
formulated the idea of Twitter as a group-messaging app in
2006, and many outsiders regarded the service as a novelty
early on, a way for people to share inane thoughts 140
characters at a time.
Inanity was no longer an issue when Twitter quickly became a
go-to feed of real-time events and reactions, as well as a
communication platform pliable enough to be handy for
activists in the Middle East, politicians in the United
States, and aid workers in tsunami-ravaged Japan.
"They turned it from a toy to a tool," Gartner analyst Jake
Sorofman said recently, "and now a platform and an
Twitter's massive growth under chief executive Dick Costolo -
Twitter announced that it had reached 500 million accounts in
2012, two years after Costolo took over - produced strong IPO
buzz in the past couple of years, but Facebook's rough Wall
Street debut quieted much of the excitement.
The company exercised a record-breaking IPO in May 2012 that
valued chief executive Mark Zuckerberg's creation at more
than $US100 billion, but problems with initial trades and
doubts about Facebook's ability to generate revenues from its
popular mobile application helped push shares from an initial
price of $US38 to less than $US20 in the first year of public
Perspectives changed just a couple months ago, as Twitter
reportedly was filing its IPO paperwork confidentially. After
showing that mobile revenues had accounted for 41 percent of
its $US1.6 billion in quarterly advertising revenue, Facebook
again became a Wall Street darling, doubling its market
capitalization to well above its IPO valuation and passing
Intel to become the sixth-most valuable tech company in
Twitter announced on September 12 - appropriately enough,
with a tweet - that it had filed IPO paperwork confidentially
with the Securities and Exchange Commission, a process that
has been in place for less than two years for companies with
less than $US1 billion in annual revenues.
Like Facebook, Twitter generates its revenues from
advertisements, with businesses paying to promote their
tweets in users' timelines on personal computers and mobile
The company has taken pains in the past year to develop its
revenue generation in the past year by opening its ad
platform to third-party software, improving ad targeting with
such as MoPub, which will allow Twitter to offer advertisers
real-time auctions for purchasing ads.
The market for technology IPOs has swung Twitter's way of
late. After only 22 of the 132 IPOs in the first eight months
of the year were in the tech sector, a glut of such companies
tested the waters in September and found treasure.
In one week's time, six Silicon Valley tech companies brought
in more than $US1 billion combined, with enterprise-software
providers Rocket Fuel and FireEye also experiencing large
first-day "pops" that at times doubled their IPO stock price.
Wall Street's direction is also rather favorable for Twitter:
While Facebook doubled its stock price in the third quarter,
the tech-heavy Nasdaq gained more than 10 percent, with Yahoo
and Netflix joining Facebook in setting all-time highs.
Twitter has the option of changing most of the terms of the
IPO outlined in its SEC filing - Facebook increased both the
number of shares and its proposed range in the week leading
up to its market debut.
Companies typically wait at least 21 days between filing
paperwork publicly and exercising their IPO, in order to meet
with potential investors in what's called a road show, which
allows executives and underwriters to pitch their initial
batch of shares and allocate orders.