Twitter hoping to avoid Facebook’s market pitfalls

Twitter has set the ball rolling for one of the most eagerly anticipated stock market flotations since Facebook took the plunge last year.

The social network has filed paperwork for an initial public offering (IPO). The move follows fervent speculation about when the company would go public and comes more than a year after Mark Zuckerberg’s Facebook enjoyed one of the biggest flotations in the US stock market history.

Estimates suggest Twitter could be worth between $10bn and $15bn (€7.5bn and €11.2bn).

In a tweet late on Thursday night, the site told users it had submitted a form to the US market regulator, the Securities and Exchange Commission (SEC), ahead of a planned IPO.

It made use of a new rule that enables firms with revenues of less than $1bn to file the documents confidentially. This means details of its finances will be kept under wraps until it begins to draw investors.

“We’ve confidentially submitted an S-1 to the SEC for a planned IPO,” it said, adding: “This tweet does not constitute an offer of any securities for sale.”

The firm followed the tweet with a picture of the Twitter offices and a message reading: “Now, back to work.”

Twitter’s potential public offering has sparked constant discussion on Wall Street since Facebook floated in May last year for $104bn.

But the company saw an initial slump in shares amid concerns over how it could boost revenue from the growing number of mobile users.

Experts said Twitter would be hoping to avoid the same issue when it makes its anticipated transition to public ownership.

No date for this has been given, though observers have suggested the site could be listed at the end of the year.

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said Twitter would need to be “very clear about how it was going to monetise”.

“They are also going to want to avoid the pitfalls that Facebook fell into,” he said.

But he added: “Twitter has had plenty of time to consider how it would avoid the pitfalls. I would hope that, on that basis, when they do come to market, they would be ready.”

Ishaq Siddiqi, market strategist at the financial spread betting firm ETX Capital, warned the market could be a “little more wary” with Twitter after the troubles that followed Facebook’s stock market debut.

“The valuation compared to Facebook, however, is far more attractive, with private investors valuing the online social networking service at $10bn,” he added.

“Speculation, however, suggests it could be north of that figure, up to $14bn.”

Twitter was founded in 2006 and has grown to become one of the largest and most powerful social media platforms in the world.

The San Francisco-based site is used as a tool by celebrities, politicians, sports stars, journalists, and millions around the globe to publish 140-character messages in real-time.

It has 200m users worldwide who post around 500m tweets a day.

The company is believed to be on track to post $583m in revenues this year and $1bn next year.

Tweet taste of success

*500 million Tweets are sent a day.

*It took three years, two months and one day for the first billion Tweets to be sent on the platform. The same number are now sent every 48 hours.

*The hashtag (#) feature, first proposed by a user, first appeared on Twitter in Aug 2007.

*There are more than 200m monthly active users around the world.

*The re-tweet feature was launched in Aug 2009, more than three years after the platform was founded.

*40% of active users simply consume content on Twitter, rather than send tweets themselves.

*There are more than 400m monthly unique visitors to twitter.com.

*Twitter supports more than 35 different languages.

*Twitter was localised in right-to-left languages Arabic, Farsi, Hebrew and Urdu, increasing the number of localised languages to 28, on Mar 6, 2012.

*70% of accounts are outside the United States.

*The most re-tweeted Tweet to date was US President Barack Obama’s message “Four more years”, after he won the presidential election on Nov 6, 2012. It was re-tweeted more than 811,000 times.

*On Mar 25, 2012, James Cameron sent a Tweet from the ocean’s deepest point, the Mariana Trench in the western Pacific.

*The first Tweet was sent in San Francisco, California, by Twitter creator Jack Dorsey on Mar 21, 2006.

*Pop star Justin Bieber has the most followers, with around 44.5m.

*Singer Adele Adkins is the Briton with the most followers, with more than 17.5m. Comedian Dara O’Briain, golfer Rory McIlroy and The Script are among the most followed in Ireland.

*Twitter has 1,500 employees at its San Francisco HQ; a further 2,000 work in offices around the world. 50% of Twitter employees are engineers.

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