Buy buy birdie: Twitter set for $11bn flotation
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) and announced the news in a tweet last night.
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 10 billion and 15 billion US dollars (£6.3 billion to £9.5 billion), with most bets around the 11 billion dollar (£6.9 billion) mark.
The micro-blogging site set out its plans last night telling users it had submitted a form to the American market regulator, the US 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 1 billion dollars (£630 million) 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."
Its initial message has already been retweeted more than 12,000 times and the subject was trending on the micro-blogging site this morning.
Twitter's potential public offering has sparked constant discussion on Wall Street since Facebook floated in May last year for 104 billion dollars (£66.2 billion).
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 10 billion dollars," he added.
"Speculation, however, suggests it could be north of that figure, up to 14 billion dollars."
Stuart Miles, founder of the tech website Pocket-Lint, said: "The IPO is the next logical step for the company and a chance for those who invested early to get some return on their investment.
"However with the company still struggling to successfully master how to monetise its huge user base, it is unsure as yet how successful a float would be. Like Facebook, it will all be about whether you fancy buying into the social network, rather than because you can see a quick return."
Twitter, founded in 2006, 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, journalists and millions around the globe to publish 140-character messages in real-time.
It has 200 million users worldwide - including 10 million active users in the UK - who post around 400 million tweets a day.
The company is believed to be on track to post 583 million dollars (£368 million) in revenues this year and 1 billion dollars (£630 million) next year.
Jed Hallam, head of social strategy at media agency Mindshare UK, said: "The news that Twitter has confidentially filed for an IPO will come as little surprise to most, as over the last 12 months there's been a marked increase in Twitter's focus on its paid advertising services, as well as an increasing focus on building relationships with key agencies and businesses.
"I'd expect to see a similar response from Twitter post-IPO that we saw from Facebook - a razor-sharp focus on building the platform into a financially viable business."
He said Twitter's decision to "strategically align" itself with television and traditional media over the last six months should "strengthen its position as it begins to focus on monetisation".
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