Twitter tweeted, “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.”
(Above Image by Annette Shaff)
Twitter wants to repeat the success that Facebook achieved and willing to make more than one billion in its stock market debut; however, the eternal question is despite the evidence that it is increasing its revenue from mobile advertising; it has not yet been able to earn profits. In its statement the company admitted that it has not yet turned a profit, and has been steadily losing money.
Twitter Files for IPO
The most awaited stock debut of Twitter is over now as the company has filed to go public. It says that it will sell shares under the name TWTR and aims to seek to raise up to $1 billion initially. The company in its first public disclosure of financial performance reveals that the profits have been growing; however, it also admitted that there are losses.
The company has filed its application with the Securities and Exchange Commission. In its filling of the form “form S-1,” the company said that it has been receiving year on year increase in revenue. Last year it was $316.9 million in 2012 in comparison to $106 million in 2011. However, its net loss for 2012 stood at $79 million.
Will It Be Able to Repeat What Facebook Did?
Facebook was one mega success; however, critics are skeptical about Twitter. Though according to some sources, Twitter is planning to raise $1.5 billion with an offering of 50 million to 55 million shares priced at $28 to $30 each, it will face huge challenges as its estimates for revenues for 2013 are near to $545 million and still under losses.
Twitter Has an Edge over Facebook
According to the sources from Twitter, the company gets more than 65 percent of its advertising revenue from mobile devices like tablets and smartphones. Moreover, when mobile advertising revenues are growing amidst the huge popularity and effectiveness of the technology, it will definitely have an edge over its competitors like Facebook.
Thanks to adapting new technology, Twitter has an edge over its competitors in developed markets like the U.S. where desktop advertising is being replaced by mobile advertising. However, it will have to face criticism about its data on the number of users i.e. how many accounts are active accounts and how many users are actually human.
To contact the reporter of this story: Jonathan millet at email@example.com