Twitter makes IPO plans public; offer price not set

Twitter had,last month,announced that it would go public but had filed confidential papers.

Written by New York Times | San Francisco | Published:October 5, 2013 4:22 am

Twitter had,last month,announced that it would go public but had filed confidential papers. On Thursday,it made its prospectus public,providing a glimpse at its financial health.

The Twitter initial public offering — the most hotly anticipated stock sale since Facebook went public last year — will make early employees and investors in the firm very rich.

Evan Williams,one of the company’s founders,owns 12 per cent of the company,a stake valued at $1.2 billion in August,when the company last priced its employee stock options. Jack Dorsey,another co-founder,owns stock worth about $483 million.

The investment firms Benchmark Capital,Union Square Ventures and Spark Capital are also large stockholders,as is DST Global,a Russian firm that made a fortune on its early investments in Facebook. In its filing,Twitter said that 75 per cent of its users entered the service through mobile devices during the second quarter and that 65 per cent of its revenue came from mobile ads. That is sharply higher than the numbers of Twitter’s much bigger rival,Facebook,which had virtually no revenue from mobile when it went public last year.

“Twitter has done a good job of growing its international user base,but now it has to work with marketers to create advertising experiences that work for those international users and for marketers,” Zachary Reiss-Davis,an analyst at Forrester,said. Its revenue for the first half of this year was $253.6 million,more than double the amount it brought in during the same period last year. Yet Twitter has been steadily losing money,reporting a net loss of $79 million last year and $69 million for the first six months of 2013.

Twitter has not set a price for its offering. When it last set an internal price for employees,in August,it valued the stock at $20.62 a share,suggesting a value at that time of $9.7 billion. That figure is equal to 22 times the sales that the company posted in the 12 months through June. Such a valuation is high,even for a young technology company,analysts say.

Vindu Goel & Michael J De La Merced

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