Social network Twitter’s prospectus about its plans for an IPO has been made public and the company aims to raise up to US$1bn in a flotation that could value it as much as US$20bn. The timing of the prospectus’ publication – usually followed three weeks later by an investor roadshow – suggests trading in mid to late November. In other words, a pretty big bird is about to be served up in time for Thanksgiving in the US.
The company’s ticker symbol will be TWTR but it is not clear whether it will trade on the New York Stock Exchange or the NASDAQ exchange.
The documents suggest Twitter recently valued itself at US$9.7bn based on the number of shares outstanding. However, once trading begins it is believed the company could be valued at closer to US$20bn.
The social network, which has unwaveringly held on to its 140-character messaging format, now has 215m monthly active users and 100m daily active users who transmit 500m messages a day.
“We aim to become an indispensable daily companion to live human experiences,” the company explained, pointing out how it is used by millions of people from around the world, as well as influential individuals and organisations, such as world leaders, government officials, celebrities, athletes, journalists, sports teams, media outlets and brands.
Explaining its business model, Twitter said: “Although we do not generate revenue directly from users or platform partners, we benefit from network effects where more activity on Twitter results in the creation and distribution of more content, which attracts more users, platform partners and advertisers, resulting in a virtuous cycle of value creation.”
75pc of monthly users access Twitter via mobile devices
The company said that mobile has become the primary driver of its business. In June, 75pc of its average monthly active users accessed Twitter from a mobile device.
Mobile devices generated some 65pc of advertising revenue in that period. “We expect that the proportion of active users on, and advertising revenue generated from, mobile devices, will continue to grow in the near term.”
In terms of revenue, the company saw a massive 198pc increase in revenue to US$316.9m between 2011 and 2012, while losses during that period fell by 38pc to US$79.4m.
In the first six months of 2013, Twitter reported revenue of US$253.6m but had a loss of US$69.3m.
In terms of who owns what, the largest Twitter shareholder specified in the prospectus is co-founder Evan Williams, who owns 12pc of the shares. Other major shareholders include Benchmark Capital, which owns 6.7pc; Twitter co-founder and chairman Jack Dorsey, who owns 4.9pc; and Twitter CEO Dick Costolo, who owns 1.6pc of the company.
Twitter bird image via Shutterstock