Now is 'Good Timing' for Twitter's IPO
Twitter has become part of an international conversation. And now the social networking company is moving to take the company public, and industry analysts say it's great timing.
Fri, September 13, 2013
And now the social networking company is moving to take the company public, and industry analysts say it's great timing.
"This is pretty good timing for Twitter to start the IPO ball rolling in public," said Dan Olds, an analyst for The Gabriel Consulting Group. "They've come a long way since 2006 and become part of the technology fabric of the world."
"With more than 200 million active users, it's obvious that Twitter is a valuable resource," he added. "But it also shows that, compared to Facebook's billion active users, there is a lot of growth still available."
Twitter said late on Thursday afternoon the company has filed with the U.S. Securities and Exchange Commission (SEC) for an initial public offering. Executives announced the move on Twitter, of course.
"We've confidentially submitted an S-1 to the SEC for a planned IPO," the company tweeted. "This tweet does not constitute an offer of any securities for sale."
The move doesn't come as a surprise. Earlier this month, reports began to surface that Twitter was heading in the direction of an IPO. And analysts noted that it would be a good time for Twitter to pay off its initial investors and early employees, while also gearing up for more acquisitions.
Another good thing is that Facebook is recovering from its own rather disappointing and tumultuous IPO last year. Now that the dust is settling from what many have called a debacle, Twitter can enter the stage without being so quickly tarnished by Facebook's bad run, analysts say.
"Twitter was waiting until Facebook's numbers looked better," said Rob Enderle, an analyst with the Enderle Group. "There was no point going out until folks could see an upside for a social media property. It should be easier for Twitter now. Earlier would have been nasty. Now both Facebook and Yahoo are up and that gives Twitter a window before something else bad happens."
During an on-stage interview Wednesday at the TechCrunch Disrupt conference in San Francisco, Facebook co-founder and CEO Mark Zuckerberg was asked what advice he would offer to Twitter about going public.
Zuckerberg laughed at the question. "It's funny on its surface," Zuckerberg replied. "Because I'm the last person you'd want to ask how to make a smooth IPO."
"It's a valuable process. Having gone through what most people would characterize as a tough first year after IPO, it's not that bad," he added. "I actually think it's made our company a lot stronger because the process leading up to going public is very in-depth. We run our company much better now."