Twitter announced in a tweet, that it has submitted papers confidentially to the Securities Exchange Commission for the most hotly anticipated stock offering in the tech sector since Facebook’s IPO in May 2012.
“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,” the company tweeted.
Under SEC rules established in the JOBS (Jumpstart Our Business Startups) Act passed last year, companies defined as “emerging growth companies” can file their S-1′s confidentially if their annual revenue is less than $1 billion.
Since Twitter’s filing was submitted to the Securities and Exchange Commission under a new law that allows small companies to keep their IPO documents private, Twitter didn’t reveal how fast it is growing or whether it is profitable.
If it goes public soon, Twitter could capitalize on a buoyant market and a hot period of new stock offerings. The U.S. IPO market is on track to produce almost 200 debuts this year, which would be the most since 2007. The IPOs have also performed well for investors, jumping an average of 13.1% in their first day of trading.
Twitter has raised more than $1 billion in private financing so far, including money used to cash out some early investors or employees. Twitter’s stock buyers have included venture-capital investors Charles River Ventures, Benchmark, Insight Venture Partners, Andreessen Horowitz and Kleiner Perkins Caufield & Byers. Wealthy investors, including funds led by Russian billionaire Yuri Milner, and mutual-fund firm T. Rowe Price Group Inc., bought private Twitter shares more recently.
About two-thirds of the 131 IPOs priced so far this year have come from confidential filings. More than 90% of eligible companies have filed confidentially since the bill was passed. Several prominent companies have filed confidential IPOs. Among them are English soccer team Manchester United (MANU), online real estate site Trulia (TRLA) and movie studio owner MGM Holdings.
Twitter’s estimated advertising revenue:
2012: $288.3 million
2013: $582.8 million
2014: $950 million
2015: $1.33 billion
Google revenue: 2012: $50.2 billion; 2011: $37.9 billion
Facebook revenue: 2012: $5.1 billion; 2011: $3.7 billion
Yahoo revenue: 2012: $5 billion; 2011: $5 billion