Sweet fancy ketchup, Twitter (NOTYET:TWIT) just announced that it filed top-secret IPO paperwork. The clever little company tweeted yesterday saying: “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.” Now let’s all get in there and tear up that S-1 so that we can figure this puppy out.
Hold up… confidential? Why? How?
Over-the-character limit
Twitter’s SEC filings have been buried under the JOBS act. A provision for start-ups — like little ol’ Twitter — allows companies with under $1 billion in annual revenue to file documents secretly. Then, a few weeks before the company kicks off its roadshow, the filings, and all the back and forth with the SEC, are brought to the public. The value for start-ups is that companies can avoid extended periods of bad press, and some of the hemming and hawing that has dragged on businesses like Facebook Inc (NASDAQ:FB).
Awesome — we know nothing
That’s not really true — we do have some information to work off of. Based on its trading in the secondary market, it looks like Twitter is running with a valuation over $10 billion. Estimates from that market are subject to lots of caveats, but it’s better than nothing — which is what Twitter has offered up.
We also know that Twitter is pulling in less than $1 billion in annual revenue, and that it’s not likely to break that barrier this year. Reports have put revenue growth at close to 100% every year, and estimated that 2014 will be the year that the company first breaks $1 billion.
It would be hard to think of a better time for a big social player to go public. Facebook Inc (NASDAQ:FB) has finally gotten back above its IPO price, and investors seem happy with its performance. That’s not surprising, as the company announced a 53% increase in revenue last quarter. On top of Facebook Inc (NASDAQ:FB)’s success, LinkedIn Corp (NYSE:LNKD)‘s shares hit a career high this week, valuing the company at $32 billion. The business continues to play an increasingly vital role in corporate hiring, and it put up a 59% increase in quarterly revenue last quarter.