After much speculation, Twitter announced its intention to be traded as a public company, on Thursday.
Naturally, the 200-million-user microblogging service made the announcement through a tweet:
We’ve confidentially submitted an S-1 to the SEC for a planned IPO. This Tweet does not constitute an offer of any securities for sale.— Twitter (@twitter) September 12, 2013
While pondering an announcement, USA Today reported that this initial public offering would be watched very carefully by other tech companies looking to take the plunge. The paper added:
"Consumer Internet public offerings took a hit after Facebook's star-crossed IPO in May 2012. (Facebook's stock has rallied, however, and is now trading at $44.07, renewing investor confidence in consumer-tech IPOs.)
"The IPO market, in general, is gaining steam. Pricings are up 38% from last year, and 131 have been filed this year, compared with 91 at the same time last year, according to Renaissance Capital — the best in several years."
Bloomberg reports that companies with "with less than $1 billion in annual revenue are able to submit IPO filings confidentially with U.S. regulators under the Jumpstart Our Business Startups, or JOBS, Act." This also means that we may learn little about the company, unless it goes public.
"Assuming Twitter does eventually decide to sell shares to the public, it will eventually have to disclose financial documents to the rest of world," All Things D reports. "In the meantime, the company and its bankers can communicate with the SEC in private."
The confidentiality will likely help Twitter avoid the public hoopla and intense scrutiny that surrounded the initial public offerings of other high-profile social networking companies, including Facebook Inc., which went public in May 2012.
Under the law, Twitter's financial statements and other sensitive information contained in the IPO filing must become publicly available at least 21 days before company's executives begin traveling around the country to meet with potential investors — a process known as a "road show."