Twitter has filed its IPO with the Securities and Exchange commission and has disclosed its goals and its concerns about its future.
1: It cost Twitter $128,800 to file its S1 form. The fee is $136.40 per $1,000,000 (prorated for amounts less than $1,000,000). It is calculated by multiplying the aggregate offering amount by .00013640 which works out at $136,400.
2: Twitter has said it is an “emerging growth company” which means it may elect to comply with certain reduced public company reporting requirements for future filings.
An emerging growth company is deemed to have ‘total annual gross revenues of less than $1 billion during its most recently completed fiscal year and if, as of December 8, 2011, it had not sold equity securities under a registration statement”.
Twitter will continue to be considered an emerging growth company for the first five fiscal years after it completes an IPO, unless its total annual gross revenues are $1 billion or more.
3: Twitter describes itself as ‘a global platform for public self-expression and conversation in real time’. It has more than 215 million monthly active users and 100 million daily active users in nearly every country.
4: The number of Twitter users is growing at a faster rate in many international markets, such as Argentina, France, Japan, Russia, Saudi Arabia and South Africa.
5: Twitter derives the substantial majority of its advertising revenue from advertisers in the United States. It also generates significantly more advertising revenue in the United States than internationally. Advertising revenue in the three months ended June 30, 2013 was $2.17 in the United States and $0.30 internationally.
6: It started giving stock based compensation to its employees in May 2011 which vest based on performance and satisfaction conditions.
7: It anticipates spending approximately $225 million to $275 million in 2013 and it said that it may use a ‘portion of the net proceeds’ to fund its anticipated capital expenditures.
8: Since the first Tweet, Twitter users have created over 300 billion Tweets.
9: Twitter believes it has significant opportunity to grow. Industry sources estimate that as of 2012 there were 2.4 billion Internet users and 1.2 billion smartphone users, of which only 215 million are Twitter users.
10: It generates all of its advertising revenue from Promoted Tweets, Promoted Accounts and Promoted Trends. It also generates revenue from licencing its data such as third parties.
11: Although Twitter does not generate its revenue directly from users or platform partners, it benefits from what it calls network effects.
This means more activity on Twitter results in the creation and distribution of more content, which attracts more users, platform partners and advertisers, resulting in a ‘virtuous cycle of value creation’.
12: It believes that a measure of engagement is a ‘timeline view’ A timeline view is where a user refreshes a timeline or views search results while logged in to Twitter's website, mobile website or desktop or mobile applications. It does not fully track data from TweetDeck and Mac clients.
13: Twitters international revenue was $53.0 million in 2012 and $62.8 million in the six months ended June 30, 2013. This represented 17 percent and 25 percent of its total revenue for those periods.
14: Twitter will issue 44,157,061 shares at an option to purchase with a weighted average exercise price of $1.82 per share.
15: It does not expect to pay any dividends in the foreseeable future.