Tag Archive | "Twitter IPO"

UPDATE: The Twitter IPO Will Likely Be One of the Biggest of 2013

Twitter IPOLike many in the technology and stock related industry, we are excited for the Twitter IPO. What started as more of a wishful anticipation has turned into a reality over the last few months, as we have been following their journey to initial public offering closely. In September, Twitter had taken the first steps to going public, as they filed their S-1 document confidentially under the JOBS Act. This new law protects all businesses from divulging their revenue early in the IPO process as long as their revenue is under $1 billion per year.

At that point it was also announced that Goldman Sachs would be the lead underwriters for Twitter.

Now, as we progress into the beginning of October, we want you to be prepared and know what to look out for with the Twitter IPO.

What You Should Know About The Twitter IPO

Because Twitter filed under the JOBS Act, there are a few things that we can count on in the next few weeks. For starters, the documents that Twitter initially withheld during the first filing will have to be made public very soon. At least before the “road shows” process begins. Following the recruitment of Goldman Sachs, Twitter also enlisted the advisement of Morgan Stanley, Deutsche Bank, Bank of America Merrill Lynch, and JPMorgan. Insiders close to the Twitter execs explained that the additional banks will be serving as Twitter’s credit lines through the process. They estimate that these lines can each extend up to almost $1 billion.

As of right now, insiders suspect that the total value of the Twitter IPO between $15 and $16 billion which would put the share prices at $28 and $30 each. It also seems that the NYSE will be a better home for Twitter than the heavily tech populated NASDAQ. Following the pace they are on, this can put Twitter on the right track to be public traded before Thanksgiving.

Key Areas to Look for in the Twitter IPO

In the following weeks it’s important to pay close attention to key areas of the documents that Twitter will have to file publicly. Take a look at the list we’ve put together below to see where:

Financial Data: Interested investors are going to want to analyze the past and recent trends, gross margins and net profits/losses by the company.

Management’s Discussion: Where Twitter’s own executives discuss the different advertising campaigns, profit streams and potential earnings. Though remember, they want you to invest, so take their words with a grain of salt.

Risk Factors: One of the most important sections to focus on. Here will be the list of challenges the business faces.

Executive Compensation: How much management earns and in what forms.

Principal/Selling Shareholders: Any current shareholder with 5% or more will be listed here.

Capital Stock Description and Voting Agreements: All interested investors will want to know who will have control over voting rights and the stock class.

Twitter IPO Wrap-Up

Many professionals and investors alike are hoping that the Twitter IPO fares better than Facebook did when they went public. It seems that since they went public, there has been more of a realistic grasp on pricing and projections. The next few weeks will surely be an exciting time for Twitter, as long as the government shutdown doesn’t last too long. With this pace we should be able to start buying Twitter on the NYSE before Thanksgiving!

What do you think? Will you be following the Twitter IPO closely? Let us know!

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Posted in IPOComments (1)

Twitter IPO Update, No Longer ‘If’, More Like ‘When’

twitter ipo update

(Photo Credit to: MediaBistro.com)

Well, it seems like Tuesday was a busy day for Jack Dorsey and the rest of Twitter’s board members. As we move further into 2013, this year’s most anticipated IPO seems to be turning into a reality. Right now, the organization is looking for help, leaving hints at the Twitter IPO launch everywhere. From the recent USA Today article to Entrepreneur’s Tuesday post, all of Dorsey and Co.’s goals seem to be lining up just as they wanted. While I won’t regurgitate information we have overviewed in past posts, I will bring those unfamiliar with Twitter’s current situation up to speed. Consider it the top five key points of the Twitter IPO.

Important Facts About Twitter IPO
1. One of the top Internet 2.0 companies planning on going public
2. Expectations are set for Twitter to make $600 million in revenue during 2013, and $1 billion in 2014.
3. As of March 2013, Twitter’s last valuation was between $9.8 and $10 billion

Aren’t those numbers ridiculous for a social media platform? Then again it’s nothing compared to the wildly exaggerated value of $100 billion that Facebook ended up with. Let’s take a look at the evidence leading us towards the Twitter IPO conclusion…

Twitter Hinting at Going Public

On Monday, USA Today featured a story about how Twitter posted a job listing on LinkedIn for a financial reporting manager. The individual that is hired by Twitter will have job duties that include “preparation of monthly reporting materials, quarterly/annual financial statements and Form S-1 when we are ready to go public.”

(Photo Credit to: Jungle-Media.com

(Photo Credit to: Jungle-Media.com)

Well, there you go, you heard it straight from LinkedIn’s post. There shouldn’t be any more speculation on whether or not Twitter will transition from private to public. The question on everyone’s mind now is, WHEN will Twitter go public?

At this point, nothing is set in stone just yet. Both Dorsey and CEO Dick Costolo have mentioned separately that Twitter is not really focusing on an IPO at this point. That being said, there is always a finite amount of time you can keep the preparation of the biggest consumer internet IPO since Facebook under wraps. Obviously there is some slight focus on their plans to go public or else they wound’t be posting job listings referring to financial management and planning!

Recent Twitter News

Besides the recent discovery of Twitter’s job posting, board member and Co-Founder Jack Dorsey has recently been in the news as well. In the last few months his other app, Square has also been gaining a lot of traction. Many are now pondering whether or not this social media genius will unleash two Web 2.0 IPOs later this year or early 2014. For more information on the Square IPO, click here.

Would You Invest in Twitter IPO?

twitter ipo update

(Photo Credit to: Entrepreneur.com)

Now, as all the hype once surrounded Facebook it seems companies are trying to accomplish the same with Twitter. As the board members fine tune their plan and hire on a Financial Reporting Manager it’s more realistic to expect the Twitter IPO to launch in the 2014 calendar rather than in the remaining months of 2013. For a business who is meticulous on the details, it’s apparent that Dorsey and company are willing to be patient during this process.

To dive into the Twitter IPO deeper, take a look at our Twitter IPO Information post.

What are your thoughts about today’s Twitter IPO update? Will you be investing in this social media giant when they go public? Or will you be avoiding this one like the plague? Let us know!

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Twitter IPO Information


Why The Twitter IPO Is Highly Anticipated

TwitterThe Twitter IPO is one of the most highly anticipated Initial Public Offerings (IPOs) in recent years.  There have been a number of high profile second generation Internet company IPOs since 2010, including Facebook and Groupon, and a variety of less well known Internet 2.0 IPOs.  The success of the second generation Internet company IPOs has been mixed, with Facebook and Groupon both disappointing IPO investors shortly after their IPOs occurred.  However, many analysts are excited about the Twitter IPO because the company has waited patiently to go public and has built a solid revenue generating business that can be valued using normal market valuation methods, rather than the massive speculation that surrounded many other second generation Internet IPOs.

Twitter IPO Date | Indications That The Twitter IPO May Happen In 2014

Twitter IPO InformationIt is important to note that Twitter has not officially announced that it intends to go public via an IPO.  Despite Twitter management dismissing the idea of an IPO any time soon, a number of analysts that follow the IPO market have noted that moves made by Twitter that indicate an IPO may be in the works, perhaps as soon as 2014.  It appears that Twitter’s Board of Directors has been transitioning the company’s corporate governance structure and management in ways that indicate intentions to go public via an IPO.  Stock market observers point out that the people Twitter hired for their management team in recent years are seasoned professionals who have years of experience working at public companies, such as Cynthia Gaylor who was hired to be the head of Twitter’s corporate development initiatives.  Ms. Gaylor is a former investment banker and managing director who worked for publicly traded Morgan Stanley.  In December 2012, Twitter Chief Executive Officer (CEO) Dick Costolo promoted Mike Grupta to the position of Chief Financial Officer (CFO).  Mr. Grupta is a particularly interesting choice, since he was part of the Zynga management’s effort to take that company public in late 2011.  Mr. Gupta is the kind of CFO a company wants in place during the transition from a private company to a public company.

A financial advisory firm that follows young companies that may be heading for IPOs, called Greencrest Capital, said they believe a Twitter IPO is likely in 2014 because of a number of developments that usually coincide with companies going public.  These include:  hiring of management that are experienced with running public companies, newly announced Twitter partnerships with well known companies, growth in Twitter users, and consistent growth in Twitter revenue.  Since Twitter is currently a private company, solid revenue figures are not known; however, industry observers, such as Greencrest and EMarketer estimate Twitter will generate approximately $600 million in revenue during 2013, and will surpass $1 billion in revenue by the end of 2014.  Twitter’s valuation is expected to approach a sizable $11 billion by the end of 2014.

These are impressive numbers for a private company and should generate sufficient interest in an IPO to make it a successful one for Twitter, which may prod the company to go forward with an IPO in 2014.  The last thing Twitter needs at this point is to have its IPO turn into another Wall Street disappointment, as many have viewed the high-profile Facebook and Groupon IPOs.  IPO watchers say that the difference between successful IPOs that do well after the IPO occurs and ones that flop are the ability for the companies to realistically project future revenues and explain their business model to investors.  Since Twitter has growing revenues and a solid business plan in place, the Twitter IPO has the hallmarks of a successful IPO, as long as it does not reach unrealistic valuations, due to investor mania and hype.

Why The Twitter IPO Should Happen In 2014

Twitter IPO 2014.pngWhile Twitter may not be forced to undergo an IPO in 2014 due to a need for cash to run its business, as revenues appear to be growing and indications are the company may even be profitable, there are a couple of reasons why the Twitter IPO date should happen in 2014.

Twitter has been working hard to avoid the United States Security and Exchange Commission (SEC) requirement that private companies with more than 500 private shareholders disclose additional financial information.  Once at the SEC disclosure threshold, there are few incentives for Twitter to remain private.  The company has avoided SEC disclosure by allowing employees to sell some shares to a few private investor funds, locking up the shares amongst a few long term holders and keeping them off of private stock trading sites, such as SecondMarket, where private sales could quickly lead to more than 500 private Twitter shareholders.  However, Twitter will eventually need to unlock its share value for current employees and investment funds holding private Twitter shares, and this can only be done via an IPO, which could force the company’s hand as soon as 2014.

With its revenue projections and business plans firmly in place by 2014, Twitter will likely want to go public via an IPO to capitalize on the continued interest by the investors in second generation Internet companies. If the company waits too long, Wall Street could turn its attention to another business sector, which would diminish the value of the Twitter IPO.  When the Twitter IPO does eventually happen, it is likely to be the hottest IPO since the Facebook IPO.

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