Twitter Files Public Registration Statement For Up To $1 Bln IPO

(RTTNews) - Social media giant Twitter, Inc. publicly unraveled in a regulatory filling on Thursday its plan to raise up to $1 billion in an initial public offering. The company said it intends to apply to list its common stock under the ticker symbol 'TWTR'. However, it did not reveal the number of shares, the pricing and stock exchange it intends to list on.

The move comes exactly three weeks after Twitter took its first step towards an IPO by filing a confidential registration statement on form S-1 with the U.S. Securities and Exchange Commission on September 12. The company had revealed this in a tweet posted on its microblogging site.

According to the new JOBS Act or the 'Jumpstart Our Business Startups Act' of April 2012, companies with less than $1 billion in annual revenue are allowed to file a confidential form S1 statement. The company has then until 21 days prior to the launch of its roadshow to make the filing public.

Twitter said it plans to use the net proceeds from the IPO to increase its capitalization and financial flexibility, create a public market for its common stock and enable access to the public equity markets for its and its stockholders.

It will also use the proceeds to acquire businesses, products, services or technologies, as well as for general corporate purposes, including working capital, operating expenses and capital expenditures.

Goldman Sachs Group, Inc. (GS) will be the lead underwriter for the offering, with Morgan Stanley (MS), J.P. Morgan Chase & Co. (JPM), Bank of America Merrill Lynch and Deutsche Bank AG (DB) servings as co-underwriters. Goldman Sachs, Morgan Stanley and JPMorgan also ran the Facebook, Inc. (FB) IPO last year, where Morgan Stanley was the lead underwriter.

Twitter will be the first social media company to go public since the troubled Facebook IPO in mid-May 2012. The Facebook IPO was long awaited event since the hugely successful offering from online professional networking site Linkedln Corp. (LNKD) in early 2011. The LinkedIn IPO ushered in a new era of Internet and social media companies floating on the stock market.

There were a slew of Internet companies that made their successful debut on Wall Street after Linkedln, including Zynga, Inc. (ZNGA), Groupon Inc., Pandora Media, Inc. (GRPN), Renren, Inc. (RENN) and Zillow, Inc. (Z).

In 2013, LinkedIn shares has soared 117 percent, while Facebook shares have gained 60 percent and is currently at an all-time high. Twitter is among the last major developed social networks to file for an IPO.

The current success of Facebook and Linkedln stock should provide the required support for the Twitter IPO in the public market.

San Francisco, California-based Twitter was founded in March 2006 by Jack Dorsey, Evan Williams and Biz Stone. It is an online social networking service and microblogging service that enables its users to send and read text-based messages of up to 140 characters, known as "tweets".

The company revealed in a tweet on its seventh birthday on March 21 that it has well over 200 million active users creating over 400 million Tweets each day.

Twitter has experienced rapid growth in revenues in recent periods, with revenues tripling in fiscal 2012 to $317 million from the prior year. Net loss also narrowed by 38 percent to $79 million from last year. Meanwhile, revenues for the first-half of 2013 has doubled to $254 million, but net loss widened by 41 percent to $69 million on higher expenses.

Twitter was valued between $9 billion to $10 billion earlier in the year after a Blackrock fund invested $80 million and also the earlier $300 million investment made by the Saudi prince Alwaleed bin Talal.

The company has reportedly raised about $1.6 billion from private investors until now. Meanwhile, Twitter's market valuation is only a tenth of Facebook's valuation of about $100 billion at the time of its IPO.

Like Facebook and other social media networks, Twitter's main source of revenues is from advertisements posted on its site alongside the tweets through smartphones and other mobile devices. In order to boost its revenues further, Twitter agreed to acquire MoPub, Inc., a mobile-focused advertising exchange for about $300 million three weeks ago.