Twitter files S-1 with the SEC | Hacker News Reader

Twitter files S-1 with the SEC

sec.gov

197 pointshornokplease142 comments

I'm mostly interested in the non-financials in the document. On the top of the list is this:

"We have implemented a disaster recovery program, which allows us to move production to a back-up data center in the event of a catastrophe. Although this program is functional, we do not currently serve network traffic equally from each data center, so if our primary data center shuts down, there will be a period of time that our products or services, or certain of our products or services, will remain inaccessible to our users or our users may experience severe issues accessing our products and services."

One of the most technically advanced software companies is still operating a single critical datacenter instead of many at once?

You'd be surprised how many large organizations don't have fully functioning disaster recovery scenarios.

Operating active/active is really hard for lots of applications, and having a spare data centre is hugely capital intensive, for little headline benefit.

Probably legacy infrastructure.

Loss of almost $80 million on $316 million in revenue, and they're offering $1b... seems like they're asking for a lot when they have very little.

Salesforce is worth $30 billion and has no earnings. Amazon is worth $143 billion and has no earnings. Facebook, with a ~$120 market cap, is valued at more than 200 times earnings. Tesla's market cap is roughly a third of Ford's.

As long as the Fed is easing, fundamentals don't matter. The mispricing in equities is particularly pronounced in prominent technology companies, but there is clear excess throughout the market.

The name of the game is momentum. This game will end, and badly, but questioning the market and fighting the Fed has not been the path to profit so keep in mind that, right now, Twitter's bottom line is practically irrelevant.

Come on, don't lump those together.

* 75% of CRM's float is sold short, market clearly agrees with you * AMZN has big FCF numbers, 2012 being an anomaly because of the big fixed capex expenditures. They grow the business without regard to engineering their GAAP earnings, which is admirable, and means the EV/FCF is probably a big, though somewhat reasonable 25-50. * FB analysis requires a DCF because they're growing earnings so fast. They're only 40 x estimated 2014 earnings * TSLA is not the same business model as F or GM, though they all nominally sell cars. Look at the leverage around licensing revenue that ARMH or QCOM showed.

I haven't read Twitter's S-1 and can't comment on it (50 x revenue makes it feel closer to CRM than any of the others), but I generally agree with your opinion that equities are near a peak because it is literally impossible for fixed income to be less attractive as an alternative and the Fed is clearly letting us know it's closer to the end of QE than the beginning. (disclaimer: nobody should make investment decisions based on my advice, I'm not a professional and you could lose all your money if you do, etc)

EDIT: after perusing the S-1 the revenue growth rate is incredible, so it may end up more like FB (which has only surpassed it's ipo price in the last month or so...)

EDIT 2: Yahoo!'s short data was laughably wrong, CRM's percent of float sold short is 10%

Salesforce, Amazon, Facebook and Tesla may all be great companies that deserve aggressive valuations based on any number of factors. But if you truly believe that you can determine what a reasonable premium is in a market that is so influenced by central bank action, I tip my hat to you because you're much smarter than many of the people who do this for a living.

> I generally agree with your opinion that equities are near a peak because it is literally impossible for fixed income to be less attractive as an alternative and the Fed is clearly letting us know it's closer to the end of QE than the beginning

Just to be clear: I didn't state any opinion as to whether we're close to a peak or not, and based on what we've seen in the past month, I wouldn't use the word "clearly" in any sentence referencing the Fed's plans to end QE. The Fed is between a rock and a hard place, and while I think certain scenarios are more likely than others, I'll just say this: the only thing that would surprise me is if there are no more surprises.

Fair enough, I didn't mean to put words in your mouth.

But I'd be curious at what price you're be willing to pay for Twitter shares based on the filing.

I don't ignore fundamentals, but for non-dividend paying issues, I trade primarily on technicals. As such, I have no interest in Twitter shares and almost certainly won't any time soon, if ever.

would you mind walking back through that and explaining the acronyms and the meanings. I can google things like FCF is Free cash flow, but understanding that? much harder

Free Cash Flow, conceptually, is the total amount of cash you would have from the company's operations as a single owner of the company in a given year.

The importance of free cash flow lies in how capital investment (buying buildings, factories, or other companies, among other things) is treated.

When a company invests money, it doesn't count against the company's profit. It is just treated as one asset turning into another asset.

/BUT/, if a company is essentially /required/ to invest money in new capital to keep the business going (think capital intensive businesses like oil exploration), as an owner you have to budget that you'll need cash to invest in new things, reducing the amount that actually comes to you.

That hit doesn't show up in profit or revenue, but it does show up in free cash flow.

thanks to all replies

A quick note (since I'm on my phone) until someone posts a better reply: ev/fcf is a financial ratio you can use to compare how much you are paying for various companies (idea being that similar companies should sell for roughly similar ratios). DCF takes all the cash a company will ever make and tells you how much you should pay for that now. Basically, there are a lot of ways to value a company and some methods are better suited for a given stage in a company's life than others (for example, many methods fall apart when a company has no earnings or has negative cash flows).

Sorry, most of those are ticker symbols (AMZN, FB, CRM, TSLA, F, GM, ARMH, and QCOM).

Other than that, QE is quantitative easing; EV/FCF is enterprise value divided by free cash flow, which can be a useful ratio sometimes (company has a lot of cash/equivalents or lots of non-cash charges lowering earnings); and DCF is discounted cash flow, which the sibling comment explains well.

> after perusing the S-1 the revenue growth rate is incredible

Well, one could also say that the growth rate of their cost base is incredible too.

Regarding the Fed and the economy, that is very true. Paul Krugman recently did a column where he suggested that there was no good way for the USA economy to move forward:

http://krugman.blogs.nytimes.com/2013/09/26/trade-and-secula...

He first suggests that we have possibly become dependent on unsustainable bubbles:

"Leaving aside the large surplus just after World War II, we went from persistent small surpluses before 1980 to persistent large deficits after 1980. This meant that we needed more domestic demand, other things equal, to achieve full employment — and arguably that we needed a series of bubbles and rising leverage, which are no longer forthcoming."

then he suggests a possible way out:

"And you might therefore argue that we can avoid secular stagnation by letting low interest rates lead to a debased dollar (hi, Congressman Ryan!), more competitive U.S. manufacturing, and balanced trade."

but then he casts doubt on the possibility of there being any way out:

"Or maybe not, because who exactly is supposed to be on the receiving end of our improved balance?"

As he has suggested in a series of recent blog posts, we might be facing a very long era of stagnation.

What's the mechanism for QE having a particularly acute affect on technology company valuations?

You can value an equity based on it's discounted future cash flow discounting by a risk-free rate (typically US 10 yr notes). QE is the Fed making large purchases of t notes on the open market to keep the rate low, in order to keep capital cheap (and ostensibly encourage investment). If they stop these purchases there is a widely held belief that the t note rates will increase, which will hurt the equity premium across all companies. You can play around with any number of free online DCF calculators to see how varying the risk free rate of return effects current valuations.

edit: I am addressing the general question, not ipo valuations.

Anybody who thinks that IPO pricing is done by DCF.....

It isn't, but it's a convenient model that holds true on average.

What people actually do is say: "oh, crap...I can't make money in fixed-income securities. I guess I'll dump my retirement in stocks instead." This flood of money eventually makes its way to the riskiest stocks and props up high valuations.

> This flood of money eventually makes its way to the riskiest stocks

Citation needed.

The same way it makes it to every other stock. People buy them, looking for returns.

Do you happen to understand why QE isn't suppose to increase the money supply? My understanding is the treasuries are bought by increasing the balance of a commercial banks federal reserve account. Can't the banks draw on that account?

The amount of reserves in the system are fixed by the Fed. Reserves can be moved from bank to bank, but the total amount in the system remains the same.

What did the government use to buy back treasuries and where did it come from?

>If they stop these purchases there is a widely held belief that the t note rates will increase

The only people calling for a crash when rates return from "historically low" to just plain old "low" are those that depend on these low rates.

It never ends well when you pile in at historical minima/maxima.

>As long as the Fed is easing, fundamentals don't matter.

Can you point to a metric, besides the obviously flawed Cape-Shiller, that shows the stock market is anywhere near a point where fundamentals "don't matter"?

>This game will end, and badly

Will it? I think it's already ended well, preventing us from going into a deep depression.

In general, valuation reflects anticipation of future potential, not present performance. This is what's called "investment."

So this is a good idea, until the Fed decides that it's not a good idea.

Looking at their adjusted EBIDTA, it looks like they managed roughly the same amount in 2012 as in 1st half of 2013. That definitely shows that they are aggressively driving to profitability.

Top line revenue is not looking quite as impressive, but 2012 is shown at $317 million, where as H1 of 2013 is shown at $254 million. If you assume same revenue levels for H2 (no idea if that's a valid assumption), you are looking at $508 million for 2013 or a 60% growth in revenues.

Add to this the sentiment comments made by others about how mainstream twitter is, and you definitely have decent justifications for high-ish stock price.

Looks like they are betting on potential. To be honest, Twitter is so mainstream that it is entirely new medium of news/discovery/conversation just like Radio/TV/Internet. I'm sure they will be extremely profitable company in the future.

I doubt it. Twitter is fundamentally flawed in a way that I'm not sure is fixable. The fact is that the vast majority of people on Twitter get no feedback at all when they post something. This is a combination of 2 things:

1) Tweets disappear quickly from a user's timeline 2) Most people have few active followers

1 and 2 work against each other to form a negative feedback loop. The result is the vast majority of users use it passively to read celebrity tweets, nothing more.

Twitter must know this as their growth is already peaking and they're not making much money. Expect to see more drastic measures to try and turn what they already have into something profitable. They've peaked.

Twitter can have value to people that post nothing. (This is the case for a number of my friends on Twitter.) And what you're describing has existed since Twitter was created as Twttr.

Right, it has value, but that value is not going to go up, is my point. Twitter users don't become more engaged over time because only a small percentage of users can use it the way it is intended.

Seems to me most of the value in Twitter is as a broadcast medium for established media entities.

500 million tweets a day means that users are getting some kind of positive reinforcement for posting, and that it's more than celebrities.

How many are retweets rather than original tweets?

How many are spam?

How many are shady i.e. pay folk in the Philippines or Pakistan to send out tweets all day, to boost the numbers?

500m tweets a day is nothing.

That's only 5,700 tweets a second.

An average IRC network for example does more than that.

The number your comparison is missing, and one that happens to be crucial to both business and technical differences, is that you should be looking at tweet impressions, not tweets.

Also interesting is if impressions should be counting followers of the tweet author or only if the follower reads it.

Many users are following so many accounts that they can only read only a small subset of their timeline. I wonder if Twitter's apps and services also have to evolve substantially like Facebook's did to include more elaborate filtering and ranking options.

I agree with you regarding Twitter's monetization opportunity; they're barely scratching the surface of what's possible, hiring like crazy (most of the expense), etc.

What seems odd to me is that they're filing for IPO right now. Do they honestly expect public markets to buy their "but it's becoming ubiquitous" story? 2000 wasn't that long ago.

Doing IPO means raising money from public markets. So with IPO money, they believe they can buy lot of companies, hire people and make it really profitable business.

FB/Google/LinkedIn didn't have to go public but they had to due to SEC regulations and/or their existing investors.

Haven't they already raised over a billion dollars have have over 1000 employees?

Exactly. It feels like they are not concentrating on their profitability yet.

When they do, I believe they will have a lot more income.

Oh my god.

They're bleeding money.

If they don't IPO now, how much longer could they last for?

Their revenue growth is pretty solid, so there is clearly potential there. Doubled revenue between first half 2012 and first half 2013, 10x yearly since 2010.

Past performance is not an indication of future... you know the rest.

They're also on track to almost double their from 2012 to 2013. Why don't people ever look at the costs? There's a reason why they are on track to lose over $100 million this year.

Another lazy post voted to the top on HN that beats the same ole lack of profit drum in a rapidly growing company. Where's the comparison to Apple to really drive home the point?

That's usually a placeholder number. They're going to raise what they can and it will probably end up much higher than $1b in stock.

For only recently opening their ad platform, that's not too surprising.

Maybe, but then what is the reason they think this is a good time for an IPO? It seems kind of desperate to my admittedly untrained eye, but it could also be brilliant.

From my naive point of view, it seems like now is when they can make their most optimistic projections that could still be taken seriously.

Somewhat tangentially, I feel Twitter sort of stopped innovating after they got big. If Google as a search engine can do Gmail, Glass and driverless cars, why has Twitter made tweeting the only business they do?

Might want to click on the link and scroll down to the financial statements. Twitter lost $70 million during the first half of this year. In fact, they didn't make a dime in 2010, 2011, or 2012 either.

I don't think I need to post Google's profits for comparison.

One is a vibrant growing company. The other is struggling to stay alive. One has billions to invest in new ideas. The other needs to raise money before they burn through it all just doing what they already do.

Twitter doesn't have a dime to invest in new ideas, unless that idea solves the profitability problem they already have.

And btw, for all that google has invested in, they are still an advertising company - 98% of their revenue. They make a bit off gmail from ads (I assume), but they haven't made anything from glass or driverless cars. This is hardly the type of innovation that Twitter needs.. where is the money going to come from for what are essentially research projects.

There's too much of this ignorance being couched as sound financial analysis here time and time again. Twitter's revenue's are exploding: $28,278,000: revenue generated in 2010, $106,313,000: revenue generated in 2011, $316,933,000: revenue generated in 2012 $253,635,000: revenue generated in the first half of 2013. They could easily be profitable if they cared to. They don't. They shouldn't. They have this fantastic opportunity to build a platform that touches everyone's lives. They have easy access to capital. Seize the day! They don't need to run Twitter like you run a corner store.

> They could easily be profitable if they cared to. They don't.

I frequently wonder about this. Funny thing is that none of these latest crop of tech ipo's, which are mostly saas or social media companies, actually make money. NONE. Not one. Years ago, non-saas software companies didn't seem to have much trouble earning money when they were in growth mode. Adobe, to pick one, ipo'd in 1986. Between 1984 and 1988 their revenues grew from $2 million to $83 million (including 110% in 1988), aka hypergrowth. Guess what? They had positive net income every single year...huge margins, too. I see stuff like this and wonder about today's saas and social media craze, and I cant help but be very skeptical about these business' abilities to make any kind of meaningful profits ever.

Is it really a coincidence that they're all managed like this, strictly for revenue growth? Or are these businesses structurally incapable of earning a profit? I honestly have no idea anymore. Salesforce has been public for almost 10 years and if they had to pay all of their comp in cash there would be almost no cash flow at all. Maybe these companies just dont add as much value as we think.

They increased their top-line revenues by ~10x over the last three years, but they also increased their sales and marketing expense by ~10x over the same time period. Call me crazy, but I'm guessing that "sales & marketing" spend is mostly sales, and they're essentially buying revenue right now.

That strategy can work, but it remains to be seen if revenue growth will continue once the sales spending slows (i.e. if the sales operation will become more efficient). If they can't make the revenue graph separate from the costs graph, they're cooked.

> They could easily be profitable if they cared to. They don't. They shouldn't.

And herein lies the problem with tech stock IPOs of this generation and this kind of thinking.

Investors are supposed to sleep easy that they've bought stock in an unprofitable company? Pretty sure the business model of "touching lives" isn't going to sit well.

Twitter is just another useless "tech" startup powered by bullshit but soon any sucker will be able to buy in on the dream. This sort of practice should be illegal. What the hell are they selling? Tweets?

>And herein lies the problem with tech stock IPOs of this generation

Of this generation? If anything there are far fewer money bleeding IPOs than there were in the late 90's.

Same thing Google does. Targeted Ads. Is Google bullshit?

No, "promoted" tweets/followers/trends aren't even close to targeted ads or what Google does.

Are you an advertiser? If not, you may not be in Twitter's customer base.

What are these promoted videos I keep seeing on Google-owned Youtube?

Amazon often operates at a break-even or loss yet investors sleep quite easy putting their money into AMZN stock.

Not really. http://ycharts.com/companies/AMZN/net_income

Amazon actually sells and produces things.

Yeah they also invest heavily in infrastructure. I am not sure if the same can be said of Twitter...

Twitter vs. Amazon? Seriously? C'mon!

> investors sleep quite easy [citation needed]

Followers, but that may just be a description for something different.

PS - Well said.

It's like I stepped off a time machine and I'm in 1999 reading the Yahoo Finance message boards.

Right. Because the world has 30 - 50 years of successful tech companies that utilized venture capital to create lasting companies of value. But you want to pick the bubble year. You want to make the next Google Glass? The next self driving car? You have two choices. Work with a very large company who will use profits from their existing businesses to subsidize your efforts for years with loss making. Or start your own company and raise capital to sustain yourself while you build a super duper company that's defensible. I think they're both great routes to take. One of the main reasons Twitter is IPO'ing is that their competition (FB and Google) have a massive war chest. They need to have the ability to stay competitive.

So they are going to raise a war chest to do battle, hooray!

Before they spend the money, will they refund the taxpayers of San Francisco for the tax break they got?

I have no idea naturally. Are you feeling like San Francisco got a raw deal out of creating all that wealth (post IPO) in their City?

The question is why they felt they deserved a tax break in the first place. They even threatened to move to Australia at one stage.

We're not talking about small businesses, strapped for cash, struggling to make ends meet, asking the city for some help so they can keep the lights on and people employed.

We're talking about well-funded companies, with an army of lawyers and accountants, deliberately bullying a city, to eek out every little advantage they can.

Not sure what stage they were when the got that tax break (nor do I know the details) I do know a lot of cities offer these and the cities tend to reap a lot of benefits through having them stay. So maybe it's fair.

What is this message board you talk of? I might be interested in lurking.

> They could easily be profitable if they cared to. > They don't need to run Twitter like you run a corner store.

You know what the difference between a corner store and Twitter is?

The corner store pays it taxes and doesn't bully the city to get a tax break!

The taxpayers of San Francisco should be demanding a refund with interest on top.

Revenue growth is decelerating significantly and they are not even close to a billion. Obviously, they will get a billion in the next year or two but given their lofty valuation expectations, they need to find a way to stem the revenue deceleration for a number of years.

Wow....sounds like you're still partying like it's 1999.

They got big but they haven't gotten profitable. I could see branching out and taking risks if they had profits to invest. Without profits branching out is a distraction from not dying.

I guess I don't have an issue with a company that tries to do one thing really well.

Agreed.

There was an article comparing the lack of innovation between Twitter and Facebook. One of its most salient insights was that Facebook's product was the vision of the founder, whereas Twitter was almost an accident, and thus there is a "don't screw it up" mentality at Twitter that limits product innovation.

Storm, mesos, and bootstrap are some very interesting projects that have come out of twitter. If they figure out how to do ads in a way that doesn't make you roll your eyes, ignore, or feel creepy, they could be standing in front of a newish form of advertising as google did a decade ago

They do sideprojects that are well received. Maybe not as far out of their main business than Google does, but Twitter's BootStrap can be seen as a huge success.

By buying Crashlytics and MoPub they have branched out a bit.

Google didn't really go full on expansive product company until after their IPO.

Maybe twitter will do the same.

I can't help myself, but Twitter seems to me like a subset of Facebook. Something like ICQ, AIM, or Yahoo Messenger is to Facebook Chat or Skype.

It came at the right time in the US, but it takes some time for these things to get abroad. While it arrived to Central Europe, Facebook had enough users and introduced features like Followers etc. Today, Twitter is solely used by a marginal tech/hip/geek community here.

And advertising goes where people go. The question is, whether this evidence suggests that the Twitter of today can't compete directly with Facebook, and it's success is based on acquiring users before FB matched it in functionality. How stable this user base is? Is it a similar case as with the chat applications?

Anecdotal evidence - a friend of mine just asked, whether one should invest in Twitter... on Facebook.

Fair question to ask! Although would agree with 'subset of Facebook' argument but therein also lies its beauty. If we look at Facebook today and filter marginal things away its used primarily to 1) Share updates and 2) Share pics. Twitter took the first point and made it better. Instagram took 2nd point and made it better. Both did well. So sometimes (in fact most of the times) its about taking only one feature and doing it extremely well and I will give credit to Twitter for this. As for the question related to a stable user base is concerned it feels people will find usage for both kind of platforms, general ones and very specific ones!

At the risk of stating the obvious, Twitter is a directed graph (one-way follow), while Facebook is (mostly) undirected (two-way follow), I have to friend you and you have to agree.

Twitter is more for the digerati, Facebook is more for the masses.

Facebook has more of a mission to capture and monetize all your social/personal info, Twitter is a little more narrowly focused.

Jack Dorsey only own 4.9% and Christopher Isaac "Biz" Stone own less than 1%, they got diluted pretty bad.

Its not necessarily just dilution. If you've got a wildly popular but not-profitable startup you'd take money off the table at every funding round as well....

At a $15B valuation, Dorsey's measily 4.9% is still worth over $700mm..

A 0.5% stake would be worth $75mm.. There are worse problems to have.

See here to see just how much funding they've taken.

> http://en.wikipedia.org/wiki/Twitter#Funding

Naive question, but how is such a large disparity between the number of shares that Williams has over Dorsey considering they're both Co-Founders?

The founding of Twitter was a bit of a mess.

This is just my understanding of it, is most likely at least partially wrong and is certainly missing details:

Williams and Noah Glass founded Odeo which did podcasting, Williams was the CEO and the initial $. Dorsey / Stone worked for Odeo. When iTunes added podcasting, the writing was on the wall for Odeo. A small group inside Odeo started working on other ideas, one of which was twitter. This group was (depending on who you ask) Glass, Dorsey and a contractor, Florian Weber. After getting the soft public release up, Glass wanted to spin out twitter as a separate company. Then some unknown stuff happened, Williams fired Glass, founded a new company called Obvious Corp with Dorsey, Stone and some others. Obvious Corp (Williams' $) bought out the investors of Odeo, thus acquiring all it's assets, including twitter then spun out twitter and sold off the assets of Odeo to a third party.

Interesting interview with Noah Glass here: http://www.businessinsider.com/twitter-cofounder-noah-glass-...

Because Williams funded the company out of his own pocket using proceeds from the Blogger sale (or more precisely proceeds from Google's IPO, since that sale was for shares). There were other investors, sure, but not too many after he cashed out the Odeo investors (some insisted on staying in, but many took their money).

Dorsey, by contrast, was hired help - an Odeo/Obvious employee and then Twitter CEO (and then ousted ex CEO).

In addition to the guess of someone else (one founder could have cashed out more or less during different funding rounds), it's also possible that one founder was an investor in subsequent rounds.

Whoever has the best lawyer?

I find it interesting how low their revenue is. With Twitter being so popular, you'd think they'd be above 1 billion in revenue.

Goes to show you how hard it is to monetize some products.

They've only just started ramping their monetization engine as they've only been offering paid solutions for a few years now. They get all their revenue from essentially two products: promoted tweets and promoted accounts, so I see their revenue as pretty impressive given their simplistic offerings. They're now trying to get a piece of the $85B/year TV ad industry in the US too, so expect to see revenue start to come in from a variety of sources. For those criticizing Twitter because the majority of its users are a passive audience, remember that TV is in the same boat and commands the lionshare of ad spend globally. There's a lot of potential here, and they are just scratching the surface with what's possible.

That's what I was thinking. If a tv network had as many views as twitter, it would be doing very well. I'm assuming, no tv network gets as many eye balls per year?

For those of us with limited IPO watching experience, what other companies have gone public with a negative bottom line?

Another question: will the infusion of capital from going public drive them towards profitability? What is there plan to become profitable?

This goes back nearly a decade, but Salesforce showed three straight years of losses before they went public.

http://www.sec.gov/Archives/edgar/data/1108524/0001193125030...

Most of them (the tech ones, anyhow). The infusion itself will not drive it towards possibility. The current plans mainly revolve around growing rapidly. As revenues increase and/or growth slows, the company will spend more energy on profits.

> what other companies have gone public with a negative bottom line?

I just casually checked on the Bloomberg and it seems fairly common. Just in the US and just in the past 12 months I see hundreds.

Hundreds of IPOs in the past 12 months?

This is incorrect.

2013 YTD there have been 886 "equity offerings" on US markets, which includes all types. If I narrow it down to Initial Public Offerings there are 233. If I narrow it down further to only Common Stock, there are 186. If I narrow it down further to those with negative net income, there are 83. So I wasn't being very precise originally by narrowing it down to IPO of Common Stock, but there are still a lot with negative income.

Thanks for following up!

Marketo I believe.

TRLA, recently

    We anticipate making capital expenditures
    in 2013 of approximately $225 million to
    $275 million

    Our users create approximately 500 million
    Tweets every day

    Over 65% of our advertising revenue was
    generated from mobile devices in the
    three months ended June 30, 2013

    our advertising revenue per timeline view
    was $0.80

    As of June 30, 2013, we had approximately
    2,000 full-time employees.

Conspicuously absent in the list of acquisitions is Atebits, Loren Brichter's company, from which Twitter for iPhone was derived.

I'm guessing they're listing acquisitions in the previous 3 years (3 years tends to be a magic number in finance, securities, and tax lookback periods; don't ask me why, probably hysterical reasons). The atebits acquisition was >36 months ago.

Interesting, thanks for the data point.

Cost of a tweet = 1/10 cent = $225,000,000 / 500,000,000 * 365

"According to the filing, Twitter has 250 million monthly active users, 100 million of those are daily active users."

I'm not a Twitter insider, but I've been crawling Twitter users for a service I'm building. Based on my experience I think the number is closer to 25 million, not 100 million, and even that is pretty generous if we're talking about DAILY active users.

Your crawls probably only surface people who create tweets. Lots of people read twitter on any given day without creating anything.

Do you account for private accounts? I am not trying to say that there are 75 million of them I am just curious. If so what percentage of user are private accounts?

8 points in 9 minutes...

I guess some folks are happy to be cashing out.

It appears that the offering price has been censored from this document:

  To the extent that the underwriters sell more than              shares 
  of common stock, the underwriters have the option to purchase up 
  to an additional              shares from Twitter at the initial public 
  offering price less the underwriting discount.

probably due to whatever act allowed Twitter to file without public scrutiny up-front.

Actually, this is because the underwriters are still pricing the deal by assessing potential market interest. Companies have always been able to amend their registration statements to fill in pricing details. See http://en.wikipedia.org/wiki/Red_herring_prospectus

Ah, noted, thank you. I hear the whispers among institutional investors is 11bn

I find $1BN to be kind of low? I guess they know better than I, but that seems quite a bit undervalued compared to other companies in tech?

$1B is the value of shares being offered to the public, not their market cap.

noted, thanks, makes more sense

Well it's currently losing money, so you could quite easily argue that $1B is rather high.

It's interested that they chose NYSE of NASDARK(DAQ).

Facebook IPO trauma?

NASDAQ no longer "owns" the tech world. I'd say it still has the edge but it's much more balanced now than it used to be. Some notable recent tech IPOs on NYSE: LinkedIn, Pandora, Trulia, RingCentral, Violin Memory, Fusion IO.

Pandora and Zillow just wanted the ego boost from having a single-letter ticker symbol.

Zillow is on NASDAQ. The symbol customs have changed as well. NYSE symbols were typically 1-3 characters while NASDAQ were 4. But of course we know FB and Z are now on NASDAQ (and LNKD on NYSE).

Thanks for the correction.

So I'm curious -- do NYSE and NASDAQ have an agreement not to assign the same ticker?

It really comes down to how good the sales pitch was.

Letter from founders/company seems to be really short and to the point, just like Twitter itself. No grandiose words but simple mission - "..to give everyone the power to create and share ideas and information instantly without barriers"

http://www.sec.gov/Archives/edgar/data/1418091/0001193125133...

Key numbers:

Revenue for first 6 months till June 2013 - $253.6 million with net loss as $69.3 million

What's the average time between filing the S-1 with the SEC and then being listed on the stock market?

Wow, they fall below what I thought the required threshold for going public now was ($500mm/yr revenue). I guess the assumption is they could scale their revenue fairly comfortably.

It looks like they are at $450m for the past 12 months (ending june 30), and are on track to pass $500m this year, even assuming no further revenue growth for the rest of the year.

Is the SEC open in the midst of the shutdown?

Why does Jack Dorsey only own 4.9%?

Probably due to this...

http://venturebeat.com/2011/09/08/twitter-400-million-round/

> Sources cited by the Financial Times claim DST has invested $400m for a 5% stake in the company, with US mutual fund T Rowe Price and an internet fund managed by JPMorgan leading a group of other investors.

I doubt Jack put in an equivalent amount to ensure he didn't get diluted:)

An investor buying 5% of the company doesn't cause a lot of dilution. Earlier rounds were certainly more dilutive.

because Jack developed twitter during employment at Odeo, which was the company of Evan Williams and Noah Glass. Eventually they would spin it out. I think 4.9% is a fair stake (when you are not risking everything to make an idea work but rather rely on your current employer to build things up with you).

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