Twitter prepares to fly IPO
Twitter appears to be getting ready to issue stock to the public in the wake of social media companion Facebook's return to favor on Wall Street.
The investment community has been expecting the micro-blogging service's initial public offering (IPO) to happen in early 2014, making the timing right for its regulatory filing to soon become public.
"The S-1 (form) could show up any time," says John Fitzgibbon, who runs IPOScoop.com.
Twitter, whose management has denied IPO plans, unintentionally signaled recently that an IPO is in the works.
The start-up posted a job listing on LinkedIn in its quest for a financial reporting manager. Twitter's job opening listed the following duties: "Responsible for preparation of monthly reporting materials, quarterly/annual financial statements and Form S-1 when we are ready to go public."
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Twitter yanked the job posting within a day of a USA TODAY report. The company added further evidence of its intent to go public with its recent hiring of a stock administration analyst. The new staffer formerly handled stock grants to meet the "IPO deadline" at troubled games-maker Zynga, according to her LinkedIn profile.
The Twitter job suggests the company is moving forward to manage the allocation of its restricted stock units ahead of a planned IPO.
"It's typical for private companies with large numbers of employees and stockholders to have stock/equity teams, and we have had one for a couple years," Twitter spokesman Jim Prosser said of the recent hiring of its stock administration analyst.
Twitter CEO Dick Costolo has publicly denied the company is focusing on an IPO. Co-founder Jack Dorsey, who sits on the board and runs Square, has told Bloomberg News that Twitter is "not even thinking" of an IPO. Square has deferred IPO-related questions to Twitter.
Twitter has a valuation of about $10 billion, estimates Wedbush Securities analyst Michael Pachter, who says the company is expected to have about $300 million in revenue this year.
"They haven't filed, so nobody has seen financials," Pachter says. "When they file, we will have more info."
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IPOs are on the rise. So far this year, 125 offerings have been priced, up 33% from last year, according to Renaissance Capital. Reasons for the increase: gains in the broader stock market and individual stocks reaching new highs.
Facebook's stock rebound helps. Its IPO flop in May 2012 put the brakes on enthusiasm for stock offerings of consumer Internet companies. At its first shareholder meeting earlier this year, individual investors lined up to complain about stock market losses from the IPO. At one point last year, the stock fell below $18 a share, less than half its $38 IPO price.
But with the stock passing its offering price this month, sentiment has begun to change on tech IPOs.
- By USA Today