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Twitter’s Co-Founder: Don’t Count on an IPO

But history says Dorsey probably will end up eating his words


Twitter has been unable to shake rumors of an initial public offering, especially amid the drought of deals since Facebook (NASDAQ:FB) came public about a year ago.

Maybe co-founder Jack Dorsey’s latest comments will do the trick.

The latest pooh-poohing is reported by Bloomberg, which quotes Jack Dorsey as saying Twitter is “not even thinking about it.”

That comment might be a bit of an exaggeration — Twitter has been getting “public-ready” for some time, building out revenue streams and hiring top executives.

But showing anti-IPO sentiment is the cool thing nowadays.

In the Bloomberg interview, Dorsey said an offering is not a “milestone” and “not the way to build a timeless company.”

Of course, that sentiment is somewhat shortsighted. No one is questioning the timelessness of companies like Apple (NASDAQ:APPL) and Google (NASDAQ:GOOG).

If anything, by going public, these operators have been able to raise substantial amounts of money that have allowed for greater R&D and more leverage for acquisitions. Plus, there’s the benefit of Wall Street pressure — it helps foster more discipline by forcing a smart balance of short- and long-term results.

Twitter is certainly not the only company with IPO aversion; many top-tier social operators are in no hurry to go public.

And the way to put things off is to do late-stage funding deals. One recent example came from ticketing company Eventbrite, which raised $60 million from late-stage investors including T. Rowe Price (NASDAQ:TROW) and Tiger Global Management LLC. A similar deal was struck by SurveyMoney, which raised a whopping $800 million in late-stage funding.

But these transactions will really just delay the inevitable. At some point, late-stage investors will push for an IPO, and that pressure will intensify as the markets strengthen.

So while Dorsey’s latest comments make for good water cooler conversation, don’t put too much stake in such anti-IPO chatter.

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,

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