Update 10/3: As this article predicted, Twitter made its IPO filing public on Thursday, October 3.
Twitter’s much anticipated IPO (or initial public offering) filing, the most eagerly awaited new stock offering since Facebook, is likely to go public this week. According to reports, Twitter has already filed secretly, as permitted in the new Jumpstart Our Business Startups Act, or JOBS Act, signed into law by President Obama in 2012, but is finally ready to reveal the offering’s impending launch.
Reports expect the Twitter IPO before Thanksgiving. The JOBS Act allows companies like Twitter to file a draft IPO prospectus confidentially, so long as they currently have less than $1 billion in annual revenue. Then, the law permits those companies to propose their share price as little as three weeks after revealing their filing. If Twitter reveals its listing documents this week, they could even make this move before Halloween.
According to Quartz, an online news site that broke the story on Sunday, sources also stress it is still possible that a number of factors could delay the filing. These factors include the likely shutdown of the US government by Congressional Republicans, as well as the state of the market and other considerations. Though Twitter revealed its secret filing publically in mid-September, it did not release the actual company information required of an IPO, though that information has been on file with the SEC since July. The company is now expected to make its filing public this week, but internal decisions at Twitter could cause the delay to go on longer.
Sources indicate that Twitter used the secret filing as a means of avoiding the frenzied hype that accompanied the Facebook IPO. That social media company’s stock price underperformed initially, but it is now trading above its IPO price, a promising sign for Twitter and its would-be investors.
Wall Street is also hoping that IPO’s this fall by well-recognized companies like Twitter, Hilton, and Chrysler will lure back individual investors, many of whom were scared away by Facebook’s early stumbles and other recent economic uncertainties. Though the market is having a strong 2013, private individuals are still considered skittish about riskier plays, especially IPOs.
Originally, the confidential filings allowed for by the JOBS Act were part of a plan to help startup companies make decisions about selling. By privately considering whether to go public, sell to another company, or simply raise more investment capital, companies could explore their options without revealing financial details.
Twitter, however, will likely reveal those details soon. It has never had any other intention than going for an IPO, and has spent all this time working on its filing. Because of that extra time, its public filing is likely to be even more informative than normal. The Street reported that Twitter is planning to be listed on the New York Stock Exchange, unlike Facebook and many other tech companies that have chosen the NASDAQ for their IPOs, and Quartz suggests this information would be revealed.
Whatever else is revealed, it is unlikely to decrease the worth of a company estimated to come out of its IPO with a value of $15 or $16 billion. Though the situation is fluid, Twitter leaders like co-founder and chairman Jack Dorsey have been planning this for a long time, and has proceeded very carefully. If the company’ has been planning to go public with its filing this week, it will take something major to keep Twitter from being the next big IPO story.
Written By: Jeremy Forbing