Twitter unveils IPO filing, aims to raise $1 billion

Twitter Inc. on Thursday released the details of its planned initial public offering and said it hopes to raise up to $1 billion in one of the year's most eagerly awaited stock market debuts.

The documents revealed for the first time how much money Twitter makes. Founded in 2006, it has never turned a profit and has an uninterrupted history of losses totaling $419 million – but its revenue is growing.

Twitter disclosed three weeks ago that it filed confidential papers to start the IPO process. The company was taking advantage of federal legislation passed last year that allows companies with less than $1 billion in revenue in its previous fiscal year to avoid submitting public IPO documents.

On Thursday, Twitter Inc. unsealed the papers with the Securities and Exchange Commission. It was required to do so at least three weeks before it starts holding events around the country to woo potential investors. At this rate, the company will likely price its IPO by Thanksgiving.

According to the IPO filings, Twitter generated $317 million in revenue in 2012 and had more than 218 million active users in the second quarter, up 44 percent from a year earlier. That compares with nearly 1.2 billion for Facebook and 240 million for LinkedIn.

Twitter also said that it lost $69.3 million in the first six months of 2013, compared with a loss of $49.1 million in the same period last year. Revenue more than doubled to $254 million from $122 million.

During the first six months of 2013, Twitter got nearly all of its revenue — 87 percent — from advertising. Advertisers pay Twitter to insert their tweets, accounts or topics into users' feeds.

Twitter's IPO has been long expected. The San Francisco-based company has been ramping up its advertising products and working to boost ad revenue in preparation. But it is still tiny compared with Facebook, which saw its hotly anticipated IPO implode last year amid worries about its ability to grow mobile ad revenue. Facebook has since made a comeback, having proven that it is able to generate money from mobile advertisements. Its stock price has been hovering around $50, up from its $38 IPO price.

Twitter's moneymaking potential has minted the company with an estimated market value of $10 billion, based on the appraisals of venture capitalists and other early investors. The IPO could value it higher or lower. PrivCo analyst Sam Hamadeh expects Twitter to aim for a market value of about $15 billion when it prices its IPO.

Twitter has 2,000 employees, up from 200 at the start of 2010.

The company did not say which stock exchange it plans to list its shares on, although it said it intends to use the ticker symbol "TWTR." It also did not say how many shares it plans to offer, or at what price.

The underwriters of the offering are Goldman Sachs, Morgan Stanley, JP Morgan, BofA Merrill Lynch, Deutsche Bank Securities and CODE Advisors.

Associated Press