Twitter files for IPO, stock trading on private markets for $15B
"We've confidentially submitted an S-1 to the SEC for a planned IPO," Twitter tweeted Thursday from its official account. "This Tweet does not constitute an offer of any securities for sale." Goldman Sachs Group is the lead underwriter on the sale, insiders told The Wall Street Journal. A Twitter spokesperson declined to comment.
Per terms of the JOBS Act, passed last year, "emerging companies" may file all paperwork to the Securities and Exchange Commission under strict confidentiality--according to the law, emerging companies are defined as startups that generate less than $1 billion in revenue. Twitter's IPO documents may remain confidential for up to 21 days before it mounts its IPO road show.
Analysts have previously estimated that Twitter's IPO could be valued at around $10 billion, but Wedbush Securities analyst Michael Pachter told The Washington Post that its stock was trading closer to $15 billion on private markets following the announcement.
Twitter passed the 200 million monthly active user milestone in late 2012, with research firm comScore reporting that 53.6 percent of unique users access the microblogging platform via mobile device. Twitter is on pace to earn $582.8 million in global ad revenue this year, according to eMarketer; that figure includes $308 million from mobile ads, up 123.2 percent year-over-year. Twitter is expected to to generate close to $1 billion in ad revenues in 2014, eMarketer adds. Earlier this month Twitter acquired mobile advertising exchange MoPub for a reported $350 million in stock.
Twitter has consistently waved off IPO speculation, but in recent weeks CEO Dick Costolo promoted Ali Rowghani to COO and hired Mike Gupta as vice president of corporate finance and treasurer, former Morgan Stanley executive Cynthia Gaylor as head of corporate development and ex-Ticketmaster CEO Nathan Hubbard as head of commerce, fueling buzz that a public offering is in its immediate future. Last month, The New York Post reported that Costolo was meeting with bankers.
The IPO is "maybe a little earlier than some people suspected. A lot of people suspected first quarter of next year," Carter Mack, president of investment banking and asset management firm JMP Group, told The Wall Street Journal. "It's been a terrific IPO market for technology-related companies this year."
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