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Twitter IPO Date Revealed by Mistake – Money Morning

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.

According to some sleuthing from PrivCo, a New York-based firm engaged in the research of privately held companies, the Twitter IPO date is Nov. 15.

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PrivCo came to the conclusion based on the proposed expiration date of the company’s lock-up period (when employees are allowed to sell their restricted stock). PrivCo found in the company’s preliminary prospectus filed with the U.S. Securities and Exchange Commission on Oct. 3 that the end of the lock-up period was listed as Feb. 15, 2014. The lock-up period typically ends 90 days from the initial public offering (IPO) date.

The reveal, PrivCo said in an email to the press, was “accidental.”

“Twitter’s IPO advisors slipped up and inadvertently revealed the end-date for the lock-up period as the fixed date of February 15, 2014, rather than leaving the date blank as most filings do until right before the final pre-Roadshow S-1 amendment, when the IPO date is announced,” PrivCo said.

Among other PrivCo findings was that Twitter upped the use of the buzz words “mobile” and “real-time.” Usage of the word mobile jumped from 91 times in July’s undisclosed filing to 131 times in the most recent revision. The use of “real-time” rose from 37 to 47 over the same time period.

Mobile has become a key word for nearly all companies as more and more people get their news, do their shopping, communicate, and seek entertainment via mobile devices. It’s also a major part of how companies like Twitter make money, as we told you about last week.

It’s quite possible the preliminary details could change, but we now at least have a target date for the Twitter IPO.

Twitter IPO Details

The date was a crucial piece of information missing from the micro-blogging site’s IPO announcement last week. We learned:

  • The stock will trade under the symbol TWTR.
  • The company plans to raise up to $1 billion.
  • Monthly active member count is 218 million, and 75% of those users access the site via mobile devices.
  • Mobile ads accounted for 65% of revenue last year.
  • Revenue rose 107% to $254 million in the first six months of 2013. Sales nearly tripled in 2012, and they nearly quadrupled in 2011. Analysts predict the company’s sales can grow 70% in 2015.
  • Goldman Sachs Group Inc. (NYSE: GS) is the lead underwriter. JPMorgan Chase & Co. (NYSE: JPM), Deutsche Bank AG (NYSE: DB), Bank of America Corp. (NYSE: BAC), and boutique firms Allen & Company and CODE Advisors will assist.

But the news wasn’t all rosy. In fact, anyone thinking of investing in Twitter stock must keep reading…

Investing in Twitter Stock? Not So Fast

  • Twitter hasn’t recorded a profit in at least three years. Net loss grew 40% in the first half of 201 to $69 million, putting the company on pace for even steeper annual losses this years as company expenses swell.
  • Advertising prices, which account for the bulk of the San Francisco-based company’s revenue, are falling. More than 87% of Twitter’s January-June revenue came from advertising.
  • Concerns are growing over “robot” accounts that spew tweets, prompting marketers to want concrete evidence their paid ads are reaching real people.
  • Many advertisers say Twitter doesn’t have enough users for them to advertise on the site. Some 22% of users are on Twitter, according to Forrester Research. By comparison, 72% check Facebook at least once a month.
  • Rate of user growth is slowing, and its international presence is weak. In Q2, Twitter’s growth in monthly active users slowed to 7% from the three months earlier, compared with 10% to 11% growth in the prior three quarters.

This is why before you race to invest in Twitter stock, consider Money Morning Chief Investment Strategist Keith Fitz-Gerald’s take on the company.

In fact, he has one chart that shows anyone who is considering buying Twitter stock why the investment could swallow their money. You have to see it – along with his complete expert analysis on investing in Twitter stock – in today’s feature: Twitter’s IPO: #Countmeout

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