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Twitter officially files for $1bn IPO, no profit in sight though

Twitter

Yup, it’s official. Twitter has filed to raise US$1-billion in its initial public offering.

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Among the details revealed in the company’s SEC filing is the fact that it had US$253-million in revenue in the first half of 2013 and is not currently running at a profit.

The documentation, which was actually filed several weeks ago, but has only been made public now, also shows that when Twitter arrives on the stock market, it will trade under the name TWTR.

In a letter to shareholders, surrounding the filing, the company said:

The mission we serve as Twitter, Inc. is to give everyone the power to create and share ideas and information instantly without barriers. Our business and revenue will always follow that mission in ways that improve–and do not detract from–a free and global conversation.

Apart from financials, the SEC filing also gives us the most up to date indication of Twitter’s user numbers. The social network says it has 215-million plus active users at the moment, who send over 500-million tweets a day.

While it’s clear that the company believes in its ability to bring in advertising revenue, it’s also clear that it’s well aware of the risks it faces as it tries to avoid the jitters Facebook faced during its first year of trading.

Under the “risks” category of the filing, the company says:

To the extent our user growth rate slows, our success will become increasingly dependent on our ability to increase levels of user engagement and ad engagement on Twitter. If people do not perceive our products and services to be useful, reliable and trustworthy, we may not be able to attract users or increase the frequency of their engagement with our platform and the ads that we display.

Another major risk revealed by the document, is that of Twitter’s competitors such as Facebook and Google. Both of which, it notes, have “greater financial resources and substantially larger user bases.”

Interestingly, the social network also notes one of its biggest strengths — the presence of celebrities and other prominent figures — could also come back to bite it, should a large enough number of them decide to move over to another platform.

The US$1-billion Twitter is looking to raise in its IPO could see the company valued at US$15-billion.

The IPO will be led by Goldman and Sachs and underwritten by JP Morgan, Morgan Stanley and Merrill Lynch, among others.

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