Twitter unveils $1bn float plan

Oliver Smith
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TWITTER aims to raise $1bn during its initial public offering according to documents made public last night.

The social network’s S1 filing, the document filed with the US Securities and Exchange commission, revealed that the company is unprofitable, and that its losses have risen 41 per cent to $69.3m during the six months ending 30 June compared to $49.1m during the same period in 2012.

Twitter, which will list under the ticker TWTR when it floats, has not specified the number or price of shares it will offer in the S1 filing.

“Twitter represents a service shaped by the people, for the people. Thank you for supporting us through your tweets, your business, and now, your potential ownership of this service we continue to build with you,” said the company in its filing.

The document revealed that Twitter has an audience of 215m monthly active users and 100m daily active users who brought the service revenue of $253.6m during the first six months of 2013, an increase of 107 per cent in the same period last year.

While the documents show Twitter has been unprofitable as far back as 2010, with losses of $420m in the interim period, its average advertising revenue per timeline view has been growing. In the three months ending 30 June advertising revenues per timeline view were up 26 per cent to $0.80 from the same period a year ago, as the social network doubles down on its advertising efforts.

More than 75 per cent of Twitter’s users access the service from their mobile devices, representing 65 per cent of the service’s advertising sales.

“We see huge growth in revenue, native mobile usage, feature phone integration and second screen dominance driving exciting growth for Twitter’s next several years of monetisation. Slowing user growth, trouble converting new users to massive engages and a relatively recent arrival at meaningful revenues are cause for some concern,” said Greencrest Capital analyst Max Wolff

With Twitter unveiling its S1 filing the company will now embark on a roadshow to market its shares to investors. The IPO could face an uphill struggle as recent IPOs such as Facebook, Groupon and Zynga have disappointed investors with share prices plunging after their launches.

Twitter’s largest shareholder is currently co-founder Evan Williams who holds 12 per cent of the company’s stock.

Venture capitalist Peter Fenton is Twitter’s second largest shareholder with 6.7 per cent of the company’s stock, having invested when it was only 25 employees strong.

Chief executive Dick Costolo, who will lead the social network’s offering over the coming months, holds 1.6 per cent of the total shares.

Twitter has not yet announced whether it will choose the Nasdaq or New York Stock Exchange to list its shares, however the float is expected to happen in November.

Goldman Sachs is listed as the lead underwriter, along with Morgan Stanley, JP Morgan, Bank of America, Deutsche Bank AG, Allen & Co and Code Advisors.