Twitter tweets its IPO plans

Twitter has started the process to file an initial public offering. Here's why the public won't get to dig into its financial data just yet.

Twitter took to its own microblogging service today to announce that it has confidentially submitted an S-1 form to the U.S. Securities and Exchange Commission to begin the process for an initial public offering.

Minutes later, the company tweeted "back to work" along with a photo of its staff, presumably taken right after the big announcement.

Here's the initial tweet, which was posted at about 5 p.m. ET.

In the past, submitting an S-1 form meant the public could finally dig into the financials of the company and get a sense of potential risks.  But a securities rule enacted last year under the Jobs Act allows companies with less than $1 billion annual revenue to file initial IPO documents confidentially.

Instead of filing lengthy documents filled with years of data, the rule gives startups the opportunity to keep their financial information under wraps until they're closer to selling their stock to investors. Under the rule, companies that qualify have to release their S-1 forma no later than 21 days before the date on which they conducts so-called roadshows with investors.

The rule is helpful for emerging companies that want to tread carefully into an IPO. And it's especially advantageous for high-profile companies like Twitter, which could withdraw its IPO plans within the allowable time frame without sharing any financial data.

Other startups and emerging companies have taken advantage of the new rule. SolarCity, for instance, put out a short statement in April 2012 ahead of its IPO plans. The company publicly filed its S-1 form in October 2012 and announced the pricing of its IPO in December 2012.

This post was originally published on Smartplanet.com