News

Twitter to go public

Warwick Ashford

After years of speculation, Twitter has finally announced that is has applied for an initial public offering (IPO).

Twitter tweeted: "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."

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The social networking firm did not indicate when it plans to make the IPO or give any other details.

The filing is the first step towards a stock exchange listing that analysts estimate will value the micro-blogging social media company at around $10bn.

While most of its peers, such as LinkedIn and Facebook, have already listed, Twitter has held out for as long as possible, prompting speculation that it may have exceeded the number of private investors allowed by US law without going public, according to the Guardian.

The move comes just over a year since Facebook’s chaotic IPO in May 2012.

At this week’s TechCrunch Disrupt conference in San Francisco, Facebook chief Mark Zuckerberg said knowing everything about a company is essential for a smooth IPO, according to the Telegraph.

“You’ve got to stay focused on doing the right stuff,” he said.

Zuckerberg cited Facebook’s strong growth in mobile as an example of the importance of identifying the right areas of focus for a company.

A lack of a clear mobile strategy affected the share price initially, but this changed in July when second quarter financial results showed an increase in crucial mobile advertising sales.

Investor confidence was boosted by a 10% increase in mobile advertising revenue from the first quarter to $656m, to make up 40% of the total advertising revenue, taking the stock price back up to IPO levels.

Twitter appears to have learned from Facebook’s mistakes, by making it easier to tweet on mobile apps and by acquiring mobile advertising firm MoPub to make it easier for companies to buy ad space.

As a public company, Twitter will be under pressure to make money, and like Facebook, mobile advertising is the most likely source of revenue to keep investors happy.

Twitter claims to have more than 200 million active users around the world, with 60% of them accessing the service from mobile devices.

UK users represent 7.5% of that total at around 15 million, with 80% accessing the service through mobile devices.


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