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Twitter Seeking To Go Public 56

Posted by samzenpus
from the own-a-piece dept.
awarrenfells writes "While Dell Inc. is announcing its desire to go private, Twitter seems to be heading in the opposite direction with its recent tweet that it seeks to go public. From the article: 'Twitter has announced that it has filed for its IPO. Since Twitter was able to submit confidentially, this indicated that it had annual revenue of less than $1 billion in its most recent fiscal year. The JOBS Act allows for “emerging growth” companies with less than $1 billion in annual gross revenue to file in secret. Goldman Sachs is believed to be the lead underwriter for the deal, and Twitter will reportedly list on the NYSE.'"
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Twitter Seeking To Go Public

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  • by Anonymous Coward

    Did they announce this in a tweet?

  • by Spottywot (1910658) on Thursday September 12, 2013 @06:42PM (#44835897)
    Bless the little hearts of those tiny emerging companies with turnover of less than $1 billion, they need all the help they can get.
  • by themushroom (197365) on Thursday September 12, 2013 @06:52PM (#44835977) Homepage

    a year or two ago when the company was on the upswing, not shortly-to-be-passé.

    • by Oakey (311319)

      That's the point of the IPO!

    • by Tackhead (54550) on Thursday September 12, 2013 @08:18PM (#44836445)

      would have been awesome had this happened a year or two ago when the company was on the upswing, not shortly-to-be-passé.

      Part of the problem with tech industry is that company lifecycles are shortening even faster than product lifecycles.

      If it takes two or three years between the decision to go public and the actual IPO (plus another 6-12 month lockout period afterwards), and a company can only exist for 5-10 years before it becomes obsolete, the time between the decision to exit and the actual exit takes up a huge portion of the company's arc.

      The VCs who backed GRPN and ZNGA made bank. Almost nobody else did. Sometimes you get lucky, like GOOG and LNKD, who raised enough capital to wall themselves off from competition. Sometimes a company can re-invent itself, like AAPL, AMZN and NFLX. Sometimes, you can find a sucker willing to pay top dollar for a worthless asset - MySpace had a good exit and left someone else holding the bag.

      But those are the rare successes. Most of the time, the founder rides the rocket all the way up and all the way down to the ground, and even he ends up getting a fraction of what could have been made if he'd only shopped the company out earlier.

      It's incredibly difficult to build a sustainable business in this industry. If you catch the big industry cycles: mainframe to micro, micro to client-server, client-server to cloud (mainframe), you can do so. Get out of sync with the industry fads - whether you're 1-2 years early or 1-2 years late - and your company will not outlast the pendulum swing. The optimum strategy is to find a fad, slap something together for $X, and try your damndest to get acqui-hired for $2X in a 1-2 year timeframe. Lather, rinse, repeat. If it's so important to be a CEO, sell the damn company anyways, and use the money you made off the last one to start the next one.

    • Twitter has reached ubiquity, especially in the entertainment industry. TV Shows now include Twitter names and hashtags quite regularly as watermark bugs as well as the longer Facebook link during the credits. It's quite telling they put them up as bugs during the actual show with the network's logo bug, and even introduce people with a graphic with their name and Twitter ID, as well as special hashtags during the show. Twitter has beaten Facebook where it counts, in the minds of those who provide entertainment to the rest of us. - HEX
      • by sublayer (2465650)

        TV Shows now include Twitter names and hashtags quite regularly as watermark bugs ... It's quite telling they put them up as bugs during the actual show ...

        I've stopped watching some TV programs because the Australian Broadcasting Corporation (ABC) has started displaying hashtags during the programs. The ABC is supposed to be non-commercial, and I refuse to watch anything that includes these advertisements. (For what it's worth, I also wrote to them and told them I was switching off. Now if only a few million other people would do likewise...)

      • by sdnoob (917382)

        TV Shows now include Twitter names and hashtags quite regularly as watermark bugs

        those same tv shows used to do the same thing with aol keywords... online, nothing lasts forever except embarrassing photos shared by teenagers.

        • by Jonah Hex (651948)
          "those same tv shows" AOL keywords, MySpace links, even Facebook links, were only on a small number of shows compared to the number using Twitter names and hashtags now. See my other comment above.
    • I dunno, I guess you float when you're likely to maximize interest. "On the upswing" is too early. "Shortly to be passe" is the same as "Still on the upswing but not for much longer". So now's a good time.

      By rights, this should be bigger than Facebook. Facebook was something people slack off doing at the office. Twitter is, however, ubiquitous, it's at the office, it's on TV, there are hashtags on cartons of orange juice.

      I'd say this is the perfect time to do it.

  • by Chas (5144)

    I honestly think it's going to be yet another fiasco for the tech sector.

    • I honestly think it's going to be yet another fiasco for the tech sector.

      I honestly think you are likely to be correct. I use Twitter a lot. It has given me amazing opportunities, that I would never have had otherwise, to interact and share my opinions with people who are so remote from me in distance, intelligence, fame, fortune*, accomplishment and occasionally notoriety.

      Here's the problem: Who will pay to sustain that? I haven't. Other users don't either. There are promoted Tweet advertisements. Do they generate adequate revenue to sustain Twitter? I doubt it, but maybe they

  • by Anonymous Coward

    raising enough capital in just 140 shares

  • This is the part where the original investors cash out and leave the smoldering rubble with regular investors. I like IPOs where the company needs money to grow, not these cash-out schemes.

    • by mysidia (191772)

      This is the part where the original investors cash out and leave the smoldering rubble with regular investors.

      Well... it is a valid exit strategy. Just like "get bought out by Apple, Google, or Microsoft" is an exit strategy.

      I don't see Twitter as a smoldering rubble though.....

      • The entire idea of an "exit strategy" exemplifies what's wrong with startup culture. An entrepreneur should be focused on building a great product and a lasting company, not on finding someone to cash them out after 18 months of part-time schmoozing.
        • The customer and I are with you...

          The entire idea of an "exit strategy" exemplifies what's wrong with startup culture.

          Yep. I agree.

          It is an intractable problem, because it the 'exist strategy' short-term notions of business you describe are not being balanced by the free market. There is a lack of regulation that is causing unfair competitive advantage to the extreme-short term investor (think high volume traders). The finance world defines itself on gaming the system faster than it can adapt to the feedbac

        • by mysidia (191772)

          The entire idea of an "exit strategy" exemplifies what's wrong with startup culture. An entrepreneur should be focused on building a great product and a lasting company

          The point of having a startup is to build a lasting business... Although 9 out of 10 startups fail, according to information I have been quoted; exit strategy means success; it means your investment pays off, and you get to reap the rewards.

          It's not that the business is done; it's that it is no longer a "startup" --- and now,

          • Except in this case, Twitter doesn't actually offer anything in value for the market cap it is seeking. I'm not so much railing on the idea of start-ups, but the idea of these businesses that kick the can down the road and create nothing of real economic value.

            • Does Twitter even make money?
              • Seems the answer is, "probably". http://www.businessinsider.com/twitter-is-obscenely-profitable-2011-6 [businessinsider.com]
                • That article doesn't give me a lot of faith. At the level of profitability estimated in that article, the valuation multiple to support what they're going after is fucking crazy.

                  • by mysidia (191772)

                    the valuation multiple to support what they're going after is fucking crazy.

                    Since the appropriate valuation multiple is determined by the expected growth rate; perhaps, it is premature to speculate on that, before they have formally disclosed their financials?

                    • I'm going to hold to my theory that this is simply a cash-out for the original investors, and that there is no long-term value to secondary market investors.

                    • by mysidia (191772)

                      I'm going to hold to my theory that this is simply a cash-out for the original investors, and that there is no long-term value to secondary market investors.

                      In other words; you think the IPO will be a pump and dump scan? Wouldn't it be wise to wait until they release the financials, before jumping to a conclusion?

                    • If you look at all their possible sources of revenue (and avenues for growth) and back out a conservative amount of expense, you're looking at a company with about $35 million in earnings. That's nothing in the grand scheme of things. It's a shitty company.

                    • by mysidia (191772)

                      If you look at all their possible sources of revenue (and avenues for growth) and back out a conservative amount of expense, you're looking at a company with about $35 million in earnings.

                      Their potential sources of future revenue include a portion marketing budgets of 10+ million small businesses in the united states; amounting to a potential of approximately $100 a month per company.

                      Or perhaps $5 to 10 billion or so a year.

              • Does Twitter even make money?

                Positive net revenue? Or have a clearly stated business plan that will result in prophit? Uncertain. The secret S-1 is a red phlag, regardless oph what Business Insider says.
                * I apologize; my "eph" key is broken, thus my misspellings.

    • by Amouth (879122)

      Well they might have tired to say what it was for when they tweeted it:

      "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."

      But they were only had 4 chars left and figured people would find "CA$H" tacky

  • by ZorinLynx (31751) on Thursday September 12, 2013 @10:17PM (#44837259) Homepage

    I've seen more than one awesome company go to suck after going public.

    Why? Before going public, they only have to follow the wishes of themselves (the board) and maybe a few investors. They have a lot of freedom on what to do. Not everything the company does MUST be for maximum profit.

    After going public, they are subject to the only desire stockholders have: Make money. Period. That's it. Taking risks and not going for maximum financial gain can mean a stockholder lawsuit.

    Enjoy Twitter while it lasts, folks.

    • by JazzXP (770338)
      This was exactly my thought when I read about it. Best way to ruin a company is to float it. No longer is it about the employees and customers, it's all about the shareholders.
    • How badly can they mess up really? It's just a website that let's you post a few characters at a time. As long as they keep that, they're ok.
      • by Artea (2527062)
        Shoehorning "Premium Services" and more advertising into it.
        • by gagol (583737)
          They already have that, and the regular service for you and me dont suck. I say they are pretty good example of social media done right. Will it stay that way? The future will tell.
      • I'm still mystified by Twitter. I have an account, but have yet to find anything useful about it. Every time I check the page, it's just a jumble of random stuff, some of it is good/interesting, but most is not. I guess I must be doing it wrong, but I haven't a clue why it is popular. Can someone here enlighten me?

        • It took me a while to figure it out too. There are two types of Twitter users. Some use it to randomly spam their friends, and get replies almost immediately. It's like a group conversation among whoever is listening at the moment. Kind of like newsgroups except it's only for your friends (because no one else cares) for people who aren't bothered by the short limit.

          The other type of Twitter user keeps it as kind of a newsfeed, following people like Vint Cerf, Linus Torvolds, Adriana Lima, Yuja Wang, Barac
          • It took me a while to figure it out too. There are two types of Twitter users. Some use it to randomly spam their friends, and get replies almost immediately. It's like a group conversation among whoever is listening at the moment. Kind of like newsgroups except it's only for your friends (because no one else cares) for people who aren't bothered by the short limit.

            So, uh, kinda like a really limited version of facebook?

            • That's my impression too, "like Facebook only not as good." Perhaps I'd feel differently if I had more friends who use it, but of the few dozen people I "follow" on Twitter, only a handful are people I actually know (and all of them are also friends on FB). As for keeping up with breaking news, FB is pretty good for that too.

              Coincidentally, an old friend who lives in the USA just wrote a book called "Twitter In 30 Minutes," so maybe that will shed some light. He just posted (on FB of course) that it should

            • Facebook doesn't show you everything your friends post, you can't have a conversation over facebook as easily.
        • by Inda (580031)
          I use it for news and nothing else. Well, I also chastise my member of parliament, but that's another story.

          There was a sonic boom over my town last year, although I did not know that at the time. It could have been a bomb. Within minutes, other people from my town were posting their tweets about the boom. A few recognised that it was a sonic boom.

          The local and national news took serveral hours to write their stories, and their stories contained nothing of interest - it was no longer news.

          That's one example
          • by Chrisq (894406)

            I use it for news and nothing else. Well, I also chastise my member of parliament, but that's another story..

            Hey, is that you Miss Whiplash [wikipedia.org]?

      • by lxs (131946)

        It's just a website that let's you post a few characters at a time.

        But before you know it they bring in new terms of service with more restrictions on the kind of messages being allowed (don't want to tarnish the corporate image you know) and suddenly they start becoming a lot more flexible about the sharing of user information. The pattern is depressingly predictable.

    • by gl4ss (559668)

      technically they only need to go for "maximum profit" if their charter says so. nowhere is it mandated that it must say maximum short term profit in their operating rules... this is a common misconception.

      however they no longer can lie about their goals - and I'm pretty sure maximum profit was their initial investors idea...

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