Twitter files for IPO but details confidential: How have other tech floats performed?
Friday, September 13, 2013/
After years of speculation, Twitter has finally filed for an IPO – and in a fitting move announced the news over the social network itself.
The float comes after the bulk of tech listings which occurred between 2011-12, but has raised a significant amount of speculation already. Because the company has less than $US1 billion in revenue, the details of the listing are confidential.
“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,” the company said on its account this morning.
A float on either the NASDAQ or the New York Stock Exchange is one of the most anticipated in the United States, and even the global tech industry. Given other major social networks including Facebook and LinkedIn have already punted on a float, Twitter is seen as one of the last major tech groups of the era to make a public move.
Speculation over the float has been rampant. Following the Facebook listing, Twitter chief Dick Costolo said an IPO wasn’t on the company’s radar.
But the announcement of a float also provides good evidence Twitter has finally hit on a revenue model to make itself sustainable. Various reports indicate the company is turning over more than half a billion dollars through advertising revenue.
It certainly seems as if Twitter has reached a significant milestone. The company has over 200 million users, but its reach is even more important. Activity on the social network is used by businesses, advertisers and content creators to gauge the temperature of reactions both good and bad.
With the Twitter documents remaining confidential, there’s little that can be revealed so far. But given Twitter sits alongside other tech giants that have floated during the past two or three years, it’s potentially useful to see how well – or badly – the company’s peers have performed:
Facebook took a lot of flack for its IPO, which fell below the listing price of $US38 on its very first day and only just recovered earlier this year.
But overall, Facebook has done okay. Since its listing back in May 2012 shares have increased by 17%, and in the year to date they’ve improved by 70% to $US45.
The music streaming service has suffered some setbacks during its time on the NYSE, and has seen a change in leadership, but overall the business has done quite well. Since its listing in 2011 the company has increased by 78%, and in the year to date shares have lifted by 167%.
What a disaster. Groupon’s float was filled with problems, including a talkative executive who brought down the Securities Exchange Commission on the company’s disclosure practices. The business even had to change its filing due to some accounting issues.
One CEO later, Groupon is suffering. Since the company’s listing in 2012, Groupon shares have plummeted 54%. Sure, shares have increased 143% this year, but long-term investors still haven’t seen a return.
The social gaming company has tanked, big time. Since the company’s listing shares have dropped by a massive 68%. In the past year, shares have increased 29%, and some believe the addition of new chief executive Don Mattrick will provide some optimism.
But whether Zynga can turn itself around remains to be seen – it still relies a lot on Facebook’s success. Too much, perhaps.
The biggest success of the tech floats over the past few years, LinkedIn’s prosperity lies in diversity – the company is essentially a recruitment tool alongside its traditional social elements.
As a result, revenue, profits and share prices have soared. Since listing in May 2011 shares have increased by a whopping 168%. This year, the price has risen 121% to $US249.
Not shabby at all.