So Twitter is filing its IPO

Jacky Yap

11 years ago

Shortly after we reported Twitter’s acquisition of MoPub as a possible signal that the company is gearing up for its IPO, today the tech giant has officially tweeted that it has indeed filed for an IPO.

According to Bloomberg, Twitter gave Goldman Sachs the job of running the sale, a person with knowledge of the matter said. However, Twitter is likely to appoint other banks on the offering.

Goldman Sachs lost out to rival Morgan Stanley on similar roles in the highest-profile technology IPOs in recent years, including Facebook Inc. (FB)’s $16 billion sale last year and offerings by Groupon Inc. and Zynga Inc. the year before. San Francisco-based Twitter may have opted for Goldman Sachs after the other offerings drew criticism and complaints from shareholders, according to Michael Holland of Holland & Co.

“The Facebook experience was one that was so egregious that Twitter did a fairly predictable thing,” said Holland, who oversees more than $4 billion as chairman of the New York-based money manager. “When the biggest and best have needed IPO services, Goldman is always a finalist.”

Facebook, Zynga and Groupon each declined by more than half in the months following their offerings, data compiled by Bloomberg show. Disappointing performance by Facebook following its offering helped to freeze the U.S. IPO market for more than a month and led to shareholder complaints over the valuation of the offering.

Here are some of numbers you should be aware about:

Twitter’s last announced number of active users was 200 million, back in February.

60 percent of US marketers are using Twitter

Secondary sales of Twitter stock have valued the company at upwards of about $10 billion

EMarketer in March estimated Twitter’s revenue at $582 million this year and close to $1 billion in 2014.

Twitter has raised more than $1 billion in private financing so far, including money used to cash out some early investors or employees.

Investors looking to buy into the much-anticipated IPO of Twitter are going to have some waiting to do before seeing if there will be any shares for them.

With most recent IPOs, there will usually be about 20% of the shares outstanding held back for individual investors, says Jay Ritter, professor of finance at the University of Florida.

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