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Social media network announces that it has filed confidential S-1 with the SEC
The inevitable has finally happened: Twitter is going public!
The social network has filed an S-1 form with the Securities and Exchange Commission, it was announced on Thursday, of course, via a Tweet:
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
The filing was done confidentially, as per a rule in the Jumpstart Our Business Startup (JOBS) Act, signed last year, which loosened regulations for "emerging growth companies," which only applies to companies with less than $1 billion in revenue.
According to that bill, companies are allowed to file for an IPO confidentially, meaning that they do not have to disclose anything about the company until 21 days before the start of its road show, where it will have to market itself to investors, if the company ever even decides to have one.
Twitter is obviously one of the most highly anticipated IPOs, certainly the most since Facebook went public last year. And the company has been taking numerous steps recently to make this process go smooth, and to not repeat the same mistakes that Facebook made.
Facebook had, as Mark Zuckerberg put it just yesterday, an "extremely turbulent first year as a public company." And that was because investors were not convinced that it could make serious money, especially off of mobile.
To wit, Facebook's stock only started to rebound once it proved it could run effective mobile ads.
Twitter knows this as well. Hence it has recently been trying to prove the effectiveness of Tweet in offline sales and advertising.
A study released by Nielsen last month, in which researchers studied a total of 221 episodes, analyzing minute-to-minute trends in the live TV ratings and tweets, showed that tweets caused ratings spikes for 29% of those episodes.
These results were good news for Twitter's tv ad targeting software, which it premiered in beta mode in May, and recently expanded to to all U.S. advertisers that run national television spots. And another study, conducted by Datalogix, through a partnership with Twitter, found that Twitter users who engaged with a Promoted Tweets caused a 12% sales lift.
Twitter has also recently been making acquisitions that pointed to it preparing for an upcoming IPO. In August it purchased real-time TV data company Trendrr to help advertisers capitalize on the increased engagement it found in the study mentioned above. And then, earlier this week, the company bought mobile-focused advertising exchange MoPub.
Both of these acquisitions were made with the idea of increasing Twitter's revenue through its advertising platform.
Since Twitter was able to file confidentially, there is no way to know any of its plans or its pricing until it has to reveal them.
The rumor going around is that Goldman Sachs will be the underwriter of the public offering. VatorNews has reached out to Twitter to confirm this, but a spokesperson declined to comment.
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