In what has been a move that appears to have been in the pipeline for a while now, Twitter has announced that some of its shares are going public, as they have submitted an S-1 to the SEC.
Of course the news was first seen on Twitter, as the company sent out the following Tweet, which acted as the first official announcement of the news:
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
This may seem like a whole heap of jargon, basically the S-1 is a form that contains basic finance information of a company, the SEC stands for the US Security and Exchange Commission and IPO stands for Initial Public Offering. The long and short of all this is members of the public, or more likely other large corporations, will soon be able to buy up stocks of Twitter.
The move is not a surprising one however, as Wired seem to have reason to believe that this is something that the social media big gun has been planning for a while.
There appear to have been some hints that an Initial Public Offering of Twitter stocks was being sought by the San Francisco company, such as the hiring of former Ticketmaster CEO Nathan Hubbard. It is normally for a significant reason that big companies hire previous employees from other big companies, it appears that Hubbard was hired to head up the move.
Twitter’s move to buy MoPub for an eye-watering $350M seems to have been the last piece of the jigsaw for this move into the stock market, as it was the acquisition of this start-up that would convince potential investors that there is money to be made in the social media game.
Facebook’s entrance to the stock market seems to have been the lesson for Twitter, as when Zuckerberg lined up an IPO for his company investors seemed to be unsure of whether they had mastered advertising on the platform, hence why initial sales of Facebook stock was low. It soon picked up when the social networking sites revenue did the same.
Through the acquisition of MoPub, who focus on helping mobile publishers manage the ads on their platforms and apps, Twitter have become the masters of their own destiny in a way. This is because they can develop an ad strategy for the site that will increase revenue form advertising, in turn increasing interest of their stocks when they go on the market.
Some reports seem to suggest that one way Twitter will increase revenue from ads is to explore more options for the format of their ads, abandoning the policy of promoted Tweets and Trends appearing on user’s timelines.
It would seem that the purchase of MoPub is the last in a long line of acquisitions by Twitter, who have had a busy year buying up social media data analysis firm Trendrr, tech training company Marakana, coding firm Ubalo and music platform We Are Hunted (which gave birth to music.twitter.com). It may be fair to assume that these acquisitions all had some relation to Twitter’s IPO, as they tried to bulk up their portfolio to make stocks as appealing as possible.
The move has been much-hyped for some years now and it is probably safe to say some in the stock exchange have been anticipating this for a while, so Twitter should do well once the IPO is finalised.