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The Twitter IPO whirlwind

Posted: , by Chris P.

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The Twitter IPO whirlwind
Is Twitter gearing for an IPO? Next month? Q4? Mid-2014? No IPO at all? Dizzy doesn't begin to describe it, as our heads swirl at yet another IPO-related snippet joining in from the latest interview with Twitter's CEO, Dick Costolo during the Aspen Ideas Festival. 

Adamant. Unyielding. Just two words that strongly correlate with behavior of top Twitter execs during the past year, when the topic of an allegedly impending IPO is brought up. Renowned for their strict code of silence (closest thing that springs to mind), the big boys at Twitter have persistently dodged and downplayed questions of the IPO and its importance to the company:

“I don’t try to get caught up in the short term-thinking about the company, in terms of the product, where we’re taking the product, in terms of reacting to what is happening on the market and the value of the company,” commented Costolo. “We have a very specific point on the horizon and we are trying to guide the company towards this notion of a global town square. It applied to Twitter, it applies to Vine and we all internally think about the things we want to achieve in order to get us there. They will work and be successful on their own merits, not in reaction to any third party valuation of the company or anything along the product lines that another company does. I try to keep the people inside the company focused on goals not competitors…you have to be smart about the landscape but then you have to be smart about where you want to take the company yourself.”


Running amok are a plethora of other informational bits on the topic. Lucky for you, we'll try to guide you through the whirlwind and bring you up to speed on latest things Twitter IPO. We'll let you be the judge on whether we're getting there or an IPO is “not necessarily inevitable.”

Word on the street is that Twitter, now 7, is about to bring in anywhere between $400 and $600 million in annual revenue for 2013, with some analyst pegging that number at a billion dollars for 2014. This is a pretty hefty sum, and Twitter has been following a trend the last few years of approximately doubling its ad revenue year on year. Call it serendipity if you like, but Twitter has had 'mobile' in its DNA since day one, so much in fact, that the first tweet ever was sent from a mobile phone in 2006, a distinction (and an advantage) that investors are keenly aware of.

The Twitter IPO whirlwind

Already sound IPO-ready? Not according to Twitter CEO, though: Costolo commented in January, amidst mounting speculations about the company's IPO options, that an IPO is not “necessarily inevitable”. Moreover, according to him, the service is just getting started.

“If you have a great business and that business is growing in a way that's satisfying to you, you can be a public company whenever you want to be a public company," Costolo pointed during a talk at the 2012 Wired 'Disruptive by Design' conference.


Furthermore, he killed off the notion of an upcoming investment round, by noting that Twitter was growing 'organically' and that the company still sat on a sizable sum from last year's one.

You might be thinking by now, perhaps Costolo is simply a tough nut to crack. Now Square CEO, Twitter's creator, Jack Dorsey, still sits on the company's board. In an April interview this year, Dorsey reinforced this notion of a unified vision and a streamlined strategy behind Twitter and the entire IPO debacle joining voice with Costolo in much the same tune. Reportedly, Dorsey even went as far as stating that Twitter “is not even thinking” of an IPO right now.

So is the IPO happening or not? And if it is, what is the ballpark number being floated around (that Costolo doesn't care about) in terms of valuation? On the count of question one, we leave that at your discretion. On valuation, a funding round in 2011 pegged Twitter at just about $8 billion. In a more recent valuation in January 2013, Greencrest Capital ups that number to somewhere between $9 and $11 billion. Twitter reported that as of February it has 200 million active users.

source: Aspen Ideas Festival, Wired 'Disruptive by Design', Greencrest Capital 1, 2

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