Twitter Files for IPO

2:46 PM PST 10/03/2013 by Paul Bond
Getty
Twitter CEO Dick Costolo

The company said it will trade under the symbol "TWTR."

Twitter filed for an initial public offering on Thursday, disclosing in its prospectus it has 215 million monthly users on average but that it lost $69 million in the first six months of this year.

Revenue, though, has soared for the company. In 2010, Twitter had just $28.3 million in sales, but it has exploded 1,020 percent to $316.9 million last year, with 85 percent coming from advertising.

The company said it will trade under the symbol "TWTR" but it didn't say which stock exchange. The company says it employs 2,000 people.

The prospectus says that co-founder Evan Williams is its biggest stakeholder with 12 percent of the company, followed by Peter Fenton of Benchmark Capital with 6.7 percent. CEO Richard Costolo holds 1.6 percent.

Costolo's salary in 2012 was $200,000, though with stock and options his compensation soared to $11.5 million. Total compensation for Adam Bain, president of global revenue, was $6.7 million, and Christopher Fry, senior vp engineering, earned $10.3 million. Peter Chernin, a member of the board of directors, was issued $3.7 million in stock awards

Twitter plans to raise about $1 billion, though the figure could change. Some analysts are predicting Twitter will be worth about $10 billion the day of its IPO.

Twitter's planned IPO is arguably the most anticipated since Facebook went public in May 2012, and the company's prospectus that was filed Thursday makes for far more interesting reading than a typical financial regulatory filing.

Twitter's prospectus, in fact, includes photos of tweets from various newsmakers like President Barack Obama and New York Mayor Michael Bloomberg, and even makes mention of one of the world's most notorious terrorists.

"A local resident in Abbottabad, Pakistan, unknowingly reported the raid on Osama Bin Laden’s compound on Twitter hours before traditional media and news outlets began to report on the event," Twitter boasts in its prospectus.

Since the company's founding seven years ago, there have been 300 billion tweets sent. During Super Bowl XLVII alone, 24 million tweets were posted, Twitter said in its filing.

"Many of the world's most trusted media outlets, including the BBC, CNN and Times of India, regularly use Twitter as a platform for content distribution," according to the prospectus.

Twitter first announced intentions for an IPO by tweeting them in September, though it was not required to lay out its financial details until about three weeks prior to its "roadshow," a multitrip event where companies try to sell themselves to potential IPO investors.

Roadshows typically last about a month, so Twitter's filing of a prospectus on Thursday suggests an IPO should occur in November.

"Many individuals and organizations choose to break news first on Twitter because of the unique reach and speed of distribution," according to the prospectus. "These events may be planned, like sporting events and television shows, or unplanned, like natural disasters and political revolutions."

Examples Twitter uses include a tweet from Oreo Cookie announcing a power outage at the 2013 Super Bowl with the message: "You can still dunk in the dark."

Twitter also includes a Tweet from Clarence House proclaiming, "Her Royal Highness The Duchess of Cambridge was safely delivered of a son at 4:24pm."

The prospectus also tells of a tweet from Oklahoma City Thunder player Kevin Durant when a lockout caused the cancellation of NBA games. "This lockout is really boring..anybody playing flag football in Okc..I need to run around or something!"

A college student tweeted back that he needed "a deep threat" for a game at Oklahoma State University, and the pro basketball player joined him. Durant scored four touchdowns and had three interceptions. "Had one of the best nights of my life tonight," the college student tweeted afterwards.

E-mail: Paul.Bond@THR.com

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