Why go through all that cookie-cutter press release rubbish, when a single short message will do the job? Twitter has just announced via its own service that it has submitted its plans for an IPO to the Securities Exchange Commission.
IPOs are Here Again
With the global economy tentatively heading back to the good times, what more of a sign could there be that things are getting back to normal than a big fat Initial Public Offering? Twitter just made the announcement via its own account, letting the world know that it is officially starting down the road to public ownership, following in the footsteps of Facebook.
With a string of acquisitions, including this week's MoPub deal behind it, the company seems to have reached the size where it needs the power of an IPO to grow faster and reach further in its deal making. Naturally, the road to the stock market is a long one, and things could change, but Twitter being a traded stock (hopefully with a ticker other that TWIT) will make its founders very rich, some lucky bankers (Goldman Sachs are rumored to be leading the IPO) even richer and provide another opportunity for social media to test the markets.
The news has widely been predicted, with Facebook's Mark Zuckerberg telling the company "not to be afraid." Which given Facebook's rocky start seems like reasonable advice. Facebook filed in February last year and went public in May 2012, which gives us an idea of a likely timeline. Although, is Christmas a good time to join the stockmarket? First indications are it will join the NYSE rather than the tech-heavy Nasdaq.
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
What's the Value of 140 Characters?
Twitter's valuation will be an interesting number to calculate. Over half a billion users sending little messages, even those Promoted Tweets, doesn't seem like a huge source of ready cash. Yet the marketing and advertising value could be huge (which is why Twitter has made all these advertising deals) and is preparing to launch Twitter Ads.
UPDATE: Now the news has had some time to settle, valuation estimates are pouring in around the $10 to $14 billion plus range. The company has three weeks to make an announcement from the first news.
However, in future the appearance of the fail whale could have a serious impact on the company stock price. And with Syrian, Chinese, Russian and other hackers taking turns to shoot down chunks of the Web, Twitter will be a very appealing target in the coming months.
Certainly, it'll be a fun ride watching Twitter from the sidelines, and good luck if you plan to invest, but as with Facebook, expect this to be anything but an ordinary IPO as the market looks for poster-brands to rally the exchanges higher.