Twitter takes first step toward going public amid predictions company will be valued at up to $20 billion. But does Twitter Really Worth $20 billion?
Twitter, the giant social media company, has filed paperwork in its first step toward an initial public offering of stock.
The social media company delivered the news in a tweet sent out at 5 p.m. that read:
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.
— Twitter (@twitter) September 12, 2013
Twitter is expected to go public at a valuation of between $15 billion and $20 billion. By comparison, Facebook’s IPO valued the social network at around $100 billion.
Bloomberg reports that Goldman Sachs is expected to be the lead underwriter of the offering.
Twitter on stock market, long overdue?
Twitter’s plan to float shares on stock market has long been expected, as the company has been ramping up its advertising products and working to boost ad revenue in preparation.
Twitter recently acquired MoPub, a mobile advertising company that has a $100 million annual revenue run rate, and in July, the company hired a number of people with IPO experience.
EMarketer estimated in March that Twitter’s revenue will be $582 million this year and close to $1 billion in 2014. The company’s ability to file its S-1 confidentially confirms that its annual revenues are below $1 billion, according to SEC rules.
The impending IPO is Silicon Valley’s most anticipated debut since Facebook’s last year, which was initially a flop.
Twitter vs Facebook stock market experience
Facebook priced its IPO in May 2012 at $38 per share, but the stock fell almost immediately, trading well below its launch price. The stock continued to fall over the next couple months, trading at $22 per share by September 2012.
A year later, however, share prices have made a full recovery. By the time the markets closed Thursday, Facebook’s stock was priced at $44 per share.
Twitter’s CEO is Dick Costolo, the company’s former Chief Operating Officer – a position now held by Rowghani Ali. Founder Jack Dorsey is chairman of the company.
additional news sourced fro Daily Mail