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On Thursday, Twitter Inc., the most popular microblogging service in the world filed for IPO. The lead underwriter in Twitters IPO would be the Goldman Sachs Group, according to unconfirmed reports. The public listing of Twitter, which has more than 200 million users worldwide, and considered an integral part of corporate social media, is the most anticipated IPO since Facebook went public.
The tweet by which the company announced that it had listed itself mentioned, “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 exact time when Twitter is going to launch its IPO is not yet known, and experts anticipate that the Twitter CEO, Dick Costolo has a lot of groundwork to do, given the recent fates of IPOs from internet companies including Facebook, Groupon and Zynga. All three companies lost more than half their market worth within six months following their listings.
Though Twitter has its own solidly carved niche, and is the leader in microblogging services, its market value is a fraction of that of Facebook. Last month GSV Capital Corp valued Twitter at about $10.5 billion, while Facebook has a market value of about $109 billion.
Twitter is going through a separate path than that followed by Facebook, and it made a confidential filing to the SEC under the JOBS Act.
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Under the rule, companies which have less than $1 billion annual revenue can submit IPO filings without making public their S-1 prospectus, until before sale. So, for now, a lot would be in the realm of speculations as it would not be possible to gain concrete insight into the financials of the company before it chooses to release such information to the public.
We can expect that Twitter’s fortunes wouldn’t be hit as much as other Internet companies that had recently gone public, because there would be little time for speculations and damaging market rumors based on the S-1.
