Twitter IPO Update: Losses Pile Up, User Growth Tepid

And despite all the negative news, the IPO should do just fine

   

Yesterday, Twitter disclosed an updated S-1 filing, with the headline announcement that the Twitter IPO will list on the NYSE under the previously known ticker TWTR.

That’s a huge blow to rival Nasdaq, which traditionally has been the hotbed for tech deals, but it’s not the only juicy detail from the Twitter S-1. Here’s a look at a few others:

Financials

Twitter revenues spiked by 104% to $169 million for the third quarter. The main driver was mobile advertising, which represented about 70% of overall ad revenues — up from 65% in Q2.

However, Twitter also continued to rack up losses — the Q3 red ink ran up to $64.6 million from $21.16 million in the year ago-period.

Part of that loss came amid Twitter’s reluctance to pull the brake on R&D and sales/marketing. Since June, the company hired more than 300 people, putting the total at over 2,300.

User Growth

On a year-over-year basis, the monthly active user (MAU) count jumped by 39% to 232 million — encouraging, but it does mask a recent slowdown in momentum. YOY growth at the end of Q2 was 44.37%, and 47.82% in Q1.

Quarter-over-quarter rates have decelerated as well, at 6.13% in Q3 vs. 6.86% in Q2 and 10.27% in Q1.

Shareholders

Twitter co-founder Evan Williams, at a 12% stake, is not the company’s largest holder. Instead, it is Suhail Rizvi — co-founder and CIO of Rizvi Traverse Management LLC and an early backer of the company — at 17.9%. Other top holders include:

JPMorgan Chase (JPM): 10.3%
Spark Capital: 6.8%
Benchmark Capital Partners: 6.6%
Union Square Ventures: 5.9%
DST Global: 5%
Jack Dorsey: 4.9%
CEO Richard Costolo: 1.6%

Deal Information

While not a part of the S-1, the buzz is that the Twitter IPO will hit the market on Nov. 15 (a Friday), according to a report from CNBC. The company is expected to fetch a valuation of $15 billion.

And although there are some troubling signs with Twitter’s business, the IPO should nonetheless have no problems finding lots of buyers. The social media sector remains strong — as seen with this year’s performance from companies like Facebook (FB), Pandora (P), Yelp (YELP) and LinkedIn (LNKD).

And while there’s nothing scientific to it, Twitter is one of the biggest names to hit the market since Facebook — which is always good for generating buzz.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/ipo-playbook/twitter-ipo-twtr-update/.

©2014 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.