Twitter Tweets: We're Planning an IPOhttp://www.fool.com/investing/general/2013/09/13/twitter-tweets-were-planning-an-ipo.aspx Daniel Sparks
September 13, 2013
It was inevitable. Twitter has finally filed to go public, according to a Tweet from the company yesterday.
According to the Journal, Twitter could go public as early as this year. With LinkedIn shares rising more than 150% since the company went public in 2011 and Facebook's (NASDAQ: FB) shares now trading above their IPO price last year, it's an excellent time for the company to go public. But will Twitter be an excellent investment? Probably not -- or at least not until it proves itself.
So, at this point, there's still very little investors know about Twitter's financials -- except that the company has less than $1 billion in annual revenue. But this fact is no surprise. According to estimates from eMarketer, Twitter will earn $582.8 million in global ad revenue this year.
Beyond the current excitement for social networking stocks like Facebook and LinkedIn, Twitter's recent growth should paint a nice backdrop for an IPO, too. If eMarketer's estimates are correct, Twitter will have bragging rights to some impressive growth metrics. eMarketer estimates that Twitter's 2013 revenue will more than double its 2012 revenue. Even more, eMarketer estimates that 53% of Twitter's ad revenue "will come from mobile this year, up from virtually no ad revenue form mobile in 2011."
Fortunately, we'll eventually get more details. According to the Journal, the JOBS Act stipulates that companies must make their filing public 21 days before they start actively shopping the IPO to investors in order to price the deal.
But, already, there are definite uncertainties looming over the stock. Here are three big ones:
Twitter only has 200 million monthly active users
Even more, 200 million MAUs is paltry number compared to Facebook's 1.15 billion MAUs. And what about Twitter's daily active users, or DAUs? Facebook boasts a whopping 699 million DAUs. Sure, Twitter benefits from a network effect. But Facebook's 699 million DAUs is definitely a threat to the microblogging site.
Facebook is adding Twitter-like features
A lofty valuation