Twitter is doing all the required paperwork with U.S. regulators so that it can issue an IPO. A tweet from the company says, “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.” According to some estimates Twitter is valued at more than $10bn and is on track to post $583 million in revenue in 2013.
Highly ambitious stock offering from Twitter is the most hotly anticipated event after Facebook’s. Now that Facebook is making a lot of money as its shares are doing well, Twitter too seems inspired by this success story. Observers say that Twitter’s flotation was though expected, this will also increase scrutiny of the company and its activities.
According to estimates from the Pew Research Center the percentage of Internet users on Twitter have more than doubled since November 2010. The center also declares that many of the service’s approximately 200 million users worldwide turned to its platform to react to the news.
Its reach is expanding from news seekers to view expressers and critics of government and corporate policies. A major challenge for Twitter after going public will be to keep it engaging for its users.
Twitter recently acquired MoPub, a mobile-focused advertising exchange for $350m so that it can expand its reach and advertising. The nature of Twitter has always been suitable for mobile phone users; buying MoPub will definitely help cash in the mobile advertising. According to observers, Twitter has done a good job of monetizing their mobile user base.
IPO after Thorough Analysis
Observers admit that Twitter in fact is one of the last of the major developed social networks to file for an IPO as Facebook and LinkedIn have already gone for it successfully. After an early debacle, Facebook improved its position and now it is a preferred stock option for investors; Twitter too may get similar success considering its lion’s share in the social media market.
However, a major challenge that Twitter may face is what the valuations would be of its shares and what would the response be from investors as no predictions can be made as of now. The latest decision on the part of Twitter is coming amidst the news that the company is willing to expand further as well as desires to reward investors who invested more than $1bn into it.