Micro-blogging service Twitter has filed for an initial public offering (IPO) in the most high-profile tech company stock market listing since Facebook did the same in 2012.
The filing, announced with just a 135-character Tweet on the official Twitter account, is currently confidential. This is in itself revealing as companies with revenues of under $1bn are allowed to file IPOs secretly under new US laws.
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
Although the exact timeframe is uncertain, the IPO is expected to happen before the end of the year. One of the biggest questions the IPO will eventually answer is how Twitter generates - or plans to generate - significant revenue.
The firm has completed a number of high-profile acquisitions in recent months, signalling that it is gathering resources to make a real push to make money from its 200 million active users, who between them send 400 million Tweets per day. On Tuesday, the firm made an estimated $350m purchase of mobile advertising firm MoPub, further signalling to potential investors that it truly understands the value of mobile advertising.
The micro-blogging site has also taken tighter control of its API, meaning that external applications which do not serve ads in the way native Twitter web and smartphone clients, cannot gain widespread traction.
Twitter's revenues are somewhat of an enigma, with no detailed business information required to be revealed until three weeks before the sale of shares is set in motion. Its value is estimated to be at around $10bn, but the IPO will not likely meet those levels unless Twitter plans to float a significant portion of the company.
The IPO will put Twitter firmly into the spotlight. Not only will the firm have to prove it can make continuous streams of cash, it will also have to prove it is able to properly handle the multitude of potential PR disasters which can come its way at any time. Twitter in the UK has come under fire in recent months, following a deluge of violent tweets directed at high-profile female campaigners and public figures. Furthermore, investors will also be concerned about the impact Twitter has on society, with events from the Arab Spring to the London riots at least partially attributed to the influence of the social network.
Twitter joins both LinkedIn and Facebook on the stock market, making it the last widely-used Western social network to do so. Facebook's IPO of last year started off in shaky fashion as a technical glitch delayed sales of its shares. The firm is now worth $108bn as it looks to take on new areas of the market such as second-screen TV interactions and mobile advertising.
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