Twitter IPO: We want $17 to $20 per share for all our - sorry, your - witterings
Loss-making ad platform thinks it's worth $12bn
Twitter will tout 70 million shares to the market, while keeping at least half a billion unsold. The social network's executive officers, directors and major backers will hold 51.4 per cent of common stock, according the SEC filing. The suggested share prices value the whole company at between $10.5bn and $12.4bn, and Twitter says it won't be paying dividends to shareholders any time soon.
"We estimate that the net proceeds from the sale of shares of our common stock in this offering will be approximately $1.25 billion (or approximately $1.44 billion if the underwriters' option to purchase additional shares of our common stock from us is exercised in full), based upon the assumed initial public offering price of $18.50 per share, which is the midpoint of the estimated offering price range," it declared.
But the company filing also warns investors that they may get their fingers burned. The firm has an accumulated deficit of $483.2m and while revenues have grown from $28.3m in 2010 to $316.9m last year, Twitter expects that growth rate to slow down in the future because so many potential customers have already signed up.
As per every company going through the IPO motions, the micro-blogging site also laid out its risks:
The market for our products and services is relatively new and may not develop as expected, if at all. People who are not our users may not understand the value of our products and services and new users may initially find our product confusing. There may be a perception that our products and services are only useful to users who tweet, or to influential users with large audiences.
In the past nine months, 89 per cent of Twitter's revenue came from advertising, up from 85 per cent the previous year. The filing stated the company will look to increase its advertising sales, but since 70 per cent of its customers access the service on mobiles, growing revenues may be quite tricky.
If you miss the chance to get shares during its stock market debut, Twitter said that in February there will be another 10 million shares potentially coming to market when employee share options vest. ®