Until today, all that was known about Twitter’s impending public stock offering was a 135-character message saying it had filed its IPO papers with the Securities and Exchange Commission. Today the company told the rest of the story, making its prospectus public for the first time. So, now that potential investors get a chance to paw through the company’s numbers, the debate begins: Is the offering a rocketship or a dog?
The New York Times Dealbook blog summarizes company financials disclosed today:
“In its second quarter this year, Twitter reported 218.3 million average monthly active users, up 44 percent from the same time a year. Its revenue for the first half of this year was $253.6 million, more than double the same time last year.
The company has also been losing money, reporting a net loss of $79 million last year and $69 million for the first six months of 2013. Even after adjusting for stock option compensation and other items like depreciation, Twitter has still reported steady losses.
In its analysis, TechCrunch focuses on Twitter’s potential challenges in overseas markets:
Here’s Twitter’s S-1 name-checking a number of services that could harm its growth: “Increased competition from local websites, mobile applications and services that provide real-time communications, such as Sina Weibo in China, LINE in Japan and Kakao in South Korea, which have expanded and may continue to expand their geographic footprint. …”
If those services were to expand to as many markets as Twitter, they could lower Twitter’s usage, and therefore its ability to sell advertisements. Twitter plans on selling advertisements in more countries in the future it states, but if Line and its ilk slow its rollout, Twitter could find its revenue growth on hold.
VentureBeat goes deeper into Twitter’s numbers and highlights Twitter’s claimed advantages as an advertising platform:
In its filing, Twitter is telling the world that it can be the “content creation, distribution, and discovery platform for the Internet and evolving mobile ecosystem,” combining the elements of public data, real-time information, conversation tone, and massive distribution. The resulting value proposition for advertisers, the company says, is: unique ad formats (its suite of promoted tweets, accounts, etc.), interest targeting, viral global reach, real-time advertising, pay-for-performance, and the extension of offline advertising, as on TV.
Finally, here’s the Associated Press’s latest writethrough on the Twitter IPO:
AP Technology Writer
NEW YORK — Twitter has unsealed the documents for its planned initial public offering of stock and says it hopes to raise up to $1 billion.
The company is also revealing for the first time the amount of money it makes. Founded in 2006, Twitter has never turned a profit and has an uninterrupted history of losses totaling $419 million since its inception. But its revenue is growing.
Twitter disclosed three weeks ago that it filed confidential IPO papers to start the process of going public.
On Thursday, San Francisco-based Twitter Inc. unsealed the papers with the Securities and Exchange Commission, giving potential investors and its user base a look inside its business. The company was taking advantage of federal legislation passed last year that allows companies with less than $1 billion in revenue in its last fiscal year to avoid submitting public IPO documents.
Twitter says that it generated $317 million in revenue in 2012 and that it had more than 218 million active users as of the end of June, up 44 percent from a year earlier. That compares with Facebook’s nearly 1.2 billion and LinkedIn’s 240 million.
The company also said that it lost $69.3 million in the first six months of 2013, compared with a loss of $49.1 million for the same period last year. Revenue more than doubled to $254 million from $122 million.
Twitter did not say which stock exchange it plans to list its shares on, though the company said it intends to use the ticker symbol “TWTR.”
The underwriters of the offering are Goldman Sachs, Morgan Stanley, JP Morgan, BofA Merrill Lynch, Deutsche Bank Securities and CODE Advisors.
Twitter’s IPO has been long expected. The company has been ramping up its advertising products and working to boost ad revenue in preparation. But it is still tiny compared with Facebook, which saw its hotly anticipated IPO implode last year amid worries about its ability to grow mobile ad revenue.
Twitter’s moneymaking potential has minted the company with an estimated market value of $10 billion, based on the appraisals of venture capitalists and other early investors. The IPO could value it higher or lower. PrivCo analyst Sam Hamadeh says he expects Twitter to aim for a market value of about $15 billion when it prices its IPO.
Twitter’s appeal is in its simplicity. Users send short messages — either public or private — that consist of up to 140 characters. Anyone can “follow” anyone else, but the relationship doesn’t have to be reciprocal, which makes the service especially attractive for celebrities and companies that use Twitter to communicate directly with customers.
Twitter has 2,000 employees, up from 200 at the start of 2010.