Thu, Oct 17, 2013 - Page 15 News List

Twitter picks NYSE for its debut offering

Reuters, SAN FRANCISCO

Twitter Inc announced on Tuesday a tripling in quarterly losses as it prepares to list on the New York Stock Exchange (NYSE) in one of the year’s most anticipated initial public offerings (IPO).

The online messaging service’s decision to go with the older exchange deals a blow to the tech-heavy NASDAQ, which bungled Facebook Inc’s offering last year.

Twitter is now expected to launch its investor roadshow on Oct. 28 where it will pitch its offering to Wall Street before shares start trading in the middle of next month, two sources familiar with the situation said on Tuesday.

In an amended IPO filing on Tuesday, the eight-year-old company showed that it sustained its recent pace of revenue and user expansion in the latest quarter ended Sept. 30 — even though its losses continued to widen.

BENEFICIARIES

Among the biggest winners of a successful IPO would be co-founder Evan Williams with a 12 percent stake. Rizvi Traverse, run by Hollywood and Silicon Valley financier Suhail Rizvi, and its affiliates hold 17.6 percent, as the largest institutional holder.

JPMorgan Chase’s alternative asset management arm holds another 10.3 percent, the filing revealed for the first time.

Chief executive officer Dick Costolo, an early angel investor, owns 1.6 percent.

Other major stakeholders include Spark Capital and Benchmark Capital, which own 6.8 percent and 6.6 percent of the company respectively. Union Square Ventures owns 5.9 percent.

Twitter’s debut will be the culmination of a journey from side-project to sociocultural phenomenon, one that has become a communications channel for everyone from the pope to US President Barack Obama.

EXPANDED LOSSES

The company more than doubled its third-quarter revenue to US$168.6 million. However, net losses widened to US$64.6 million in the quarter ending September compared with US$21.6 million a year earlier.

Last quarter also saw Twitter grow its monthly active users 39 percent to 231.7 million on average.

That figure was up from about 218 million when the company first disclosed its IPO filing on Oct. 3.

Those losses were driven partly by a 158 percent surge in sales and marketing spending, as the company ramped up its sales force in offices around the world to push its advertising platform.

Sales and marketing costs rose to US$61.2 million from US$23.7 million a year earlier.

Twitter said its revenue is increasingly coming from mobile devices, the preferred way for most users to log on.

Last quarter, more than 70 percent of its advertising revenue came from phones and tablets versus 65 percent in the previous quarter.

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