Twitter CEO Dick Costolo spoke at the Techcrunch Disrupt conference and the mere fact that he declined to take questions afterwards has been read by USA Today as a signal that he’s in the advanced stages of preparing for his company’s IPO.
So let’s look at everything we know about Twitter’s expected but not yet confirmed IPO plans.
– Costolo spoke on the topic of “how to lead.” He declined to take questions afterwards. That’s not dispositive one way or another, of course, but companies that are preparing or expecting to file paperwork with the SEC often go through “quiet periods” which restrict executives from saying anything that might prime the market. We’re not saying Twitter is in a quiet period. But if Costolo were acting in an abundance of caution prior to an imminent S-1 filing with the SEC, then not talking to the press would fit that gameplan.
– Facebook’s Mark Zuckerberg had some advice for Costolo and Twitter, also at the Disrupt event: “I’ve been very outspoken about staying private as long as possible … But in retrospect, I was too afraid of going public. I don’t think it’s necessary to do that.”
– Twitter just demonstrated it has robust potential revenue growth by acquiring MoPub, a mobile ad exchange/publisher network, for $US350 million in stock.
– Twitter funder Peter Fenton of the venture fund Benchmark is feeling confident in his portfolio of stakes, which includes a famous bet on Twitter. Benchmark contributed in two rounds that totaled $US135 million, and included other funders. He wasn’t addressing Twitter’s IPO specifically in this recent Bloomberg piece, but hey, timing! “When I was 26 years old practicing in the venture business, I hadn’t seen enough patterns of scaling to really identify how we could best help a company … Having invested in software for a decade, if for no other reason than you’ve done it for 10,000 hours and 10 years, you start to get good at it.”
– Twitter is talking to banks about handling the public stock offering, according to the S.F. Chronicle. Twitter’s finance chief, Mike Gupta, obviously, is leading those talks. He joined Twitter in 2012 and has public stock market experience from stints at Yahoo and Zynga.
– Gupta is exactly the kind of guy you’d hire if you wanted to do an IPO, according to Fenton. He told the Chronicle, “A lot of people are trying to understand, ‘How does this thing work? How does it make money?’ … He has a layman’s ability to simplify and express it in a way that’s not overly complicated.” Investor roadshows — where the company presents its financials to potential buyers — are a big part of IPOs.
– Wall Street analysts are already talking and behaving as if the S-1 papers are being written as we speak. The Twitter IPO will be regarded as a bellwether for the rest of the IPO market, they say.
– Twitter has taken $US1.16 billion in funding and those people will want their money back, plus a premium, at some point. That’s such a large sum of investment for a startup that one of the only ways to get it back would be to either IPO or be acquired by an even larger company. The latter scenario isn’t even a rumour.
– And then there are the ellipses … which Fox Business seemed to think were terrifically important.