Ladies and gentleman, the moment you have all been waiting for is fast-approaching: Twitter is due to file the small print on its initial public offering, a bulky S-1 registration statement that will allow investors a peek into the messaging platform’s business.
Here is the Financial Times “Ctrl-F” guide to getting the news fast (Alternatively, please tune in to FT.com when it happens, where we’ll do the heavy lifting for you):
1. “Calculation of registration fee” – This may sound like the most boring part, but is actually Twitter’s best guess of the maximum amount of money the company will raise. Although valuations for the whole of Twitter from $10bn to $15bn have been bounced around, the site is expected to raise only around $1bn-$1.5bn. This number, however, can be amended before the actual IPO.
2. “Summary consolidated financial data” – the crib notes on revenue and, if there is one, a profit. Research firm e-Marketer predicts global advertising revenues of $582.8m this year for Twitter, up from $288m last year. Keep an eye on the pace of growth – any slackening and Wall Street will be worried. Similarly, active user growth is worth watching, since while many people sign up to the service, far fewer use it regularly enough for advertisers to be interested in them.
3. “Letter from . . . “ – a founder’s letter is not a legal requirement but is usually where technology companies set out why their product will change the world and sometimes warn potential shareholders they will not put profit first. As none of the three co-founders – Jack Dorsey, Biz Stone and Ev Williams – are still working full time at Twitter, it will be interesting to see who pens the missive: one of them, or chief executive Dick Costolo.
4. “Principal and selling stockholders” – who is making the big bucks. Any shareholder who owns more than 5 per cent of the stock has to be listed here, alongside the size of each directors’ stake. Possible big winners include Benchmark Capital, where partner Peter Fenton has a seat on the Twitter board, and Chris Sacca of Lowercase Capital, where much of the fund’s capital is reported to come from JP Morgan. Also look for founders and early investors who have already sold down their share.
5. “Description of capital stock” and “voting agreements” – Is it a straight-forward offering or will Twitter choose to use an auction system? Are there more than one class of stock and who controls the voting rights?