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Tag: ipo

  • GoDaddy Files for a $100 Million IPO

    In 2006, web hosting company GoDaddy.com decided it was time to file for an initial public offering (IPO). However, it quickly changed its mind after learning that it would have to take a 50 percent haircut (a loss on the market-value of a stock to provide a cushion for the brokerage company in case the investment loses money) on its initial public offering.

    Since then, GoDaddy has experienced a plethora of financial issues, eventually culminating in a business-saving, $2.25 billion investment from three different private equity firms in 2011 – KKR & Co. (KKR), Silver Lake Partners and Technology Crossover Ventures. Collectively, these three companies now own 69 percent of GoDaddy, with founder Bob Parsons owning 28 percent himself.

    Unfortunately, these investments have not led GoDaddy out of financial straits. Despite posting a 24 percent increase in revenue from last year, GoDaddy still lost $200 million last year. Surprisingly, this number represents a vast improvement from 2012, where GoDaddy lost $279 million. Through the first quarter of this year, GoDaddy has posted $51 million in losses.

    It is due to these extreme losses on a yearly basis that GoDaddy has finally decided to file for its IPO. With this offering, GoDaddy hopes to raise approximately $100 million, with all of the proceeds going toward repayments of its debts. However, this number is very likely to change once the company actually hits the market.

    Fortunately for GoDaddy and its future investors, the non-financial numbers have been trending up for the company for quite some time. GoDaddy has reported an increasing customer base of 13 percent over the last few years, with its total number of customers reaching 11.6 million in 2013.

    GoDaddy also has precedence on its side. Twitter was successful with its IPO foray late last year, and GoDaddy competitor Endurance International Group Holdings Inc. (EIGI) has posted a 14 percent growth in shares since its company went public last year.

    Image via YouTube

  • Report: Square Not Ready To Go Public This Year

    It’s looking like Square won’t be going public in 2014 as multiple reports indicate IPO aspirations have been put on hold.

    Last week, The Information reported that the company was considering raising another round of funding that would delay an IPO.

    The Wall Street Journal had reported back in November that Square was eyeing an offering for this year.

    Now, Fox Business reports that “people with knowledge of Square’s finances” say it’s not ready to go public this year:

    The San Francisco-based Square had been taking steps towards a public offering, meeting with Nasdaq executives as recently as the fourth quarter of 2013, according to a person familiar with the situation. Around that same time, it was reported that Square had been discussing a 2014 IPO with investment bankers.

    But in recent weeks, people close to Square have indicated to Wall Street executives that a 2014 offering is unlikely because the company has run into problems with its “revenue run rate,” a key projection of future performance. It has been reported that Square is unprofitable, but that 2013 revenues exceeded $100 million.

    One of Fox’s sources said Square’s revenues as a public company could not substantiate its private-market valuation.

    Last week, Square announced the acquisition of appointment-booking software maker BookFresh. It has also begun testing a new app that lets users place pick-up orders with Square merchants.

    Image via Square, Twitter

  • Prince Alwaleed Says Twitter Will Succeed Post IPO

    Billionaire Saudi Prince Alwaleed bin Talal, who’d invested $300 million in Twitter 2 years ago, says he thinks that the social media platform needs to focus on generating revenue. Twitter raised $1.82 billion during its November 7th IPO, and its stock jumped 73 percent after debuting, selling roughly 70 million shares to investors.

    Alwaleed put his $300 million into Twitter in December of 2011, and has demonstrated that he’s bullish about how the unprofitable social network might generate income from its over 200 million users. “When we analyzed Twitter, we believed in its business model,” Alwaleed said, adding, “You bet on the company and that the monetization process is going to be successful. We’re seeing some success in that process.”

    So far, Prince Alwaleed has made good use of Twitter, garnering over a million followers:

    Al Waleed bin Talal bin Abdulaziz al Saud is a member of the Saudi royal family, as well as the founder, CEO, and 95%-owner of the Kingdom Holding Company. In March 2013, Forbes Magazine listed Alwaleed as the 26th-richest man in the world, with an estimated net worth of $20 billion. Some have said that Alwaleed’s Twitter investment was an act of self-preservation, as the platform had been used to coordinate uprisings in his home region, and some noted the correlation between sudden censorship within the network, soon after getting a $300 million handshake from the Prince.

    Twitter’s revenue reached $534.5 million during the 12 months before September 30, though user growth is slowing. The platform had 231.7 million monthly users in the quarter that ended in September, a 39 percent increase from the year before. Still, Twitter saw a growth of 65 percent during the year before that.

    Image via Twitter.

  • Twitter Closes First Day at NYSE at $44.90 a Share

    Twitter Inc., the company known for the micro-blogging/social networking free service Twitter (i.e. a 140 character per-status update (“tweet”) feed in which users can follow, send, and read) began trading on the New York Stock Exchange (NYSE) at 9:30 AM on Wednesday. Shares rose as high as $50.09.

    This means that Twitter Inc. (TWTR) is now a public company, and upon launch, shares were priced at $26 a pop, initially valuing the company at $18.34 billion.

    To put that $18.34 billion in perspective:

    • Yahoo (YHOO) – $33.45 billion
    • Kellogg Company (K) – $22.5 billion
    • Twitter, Inc. (TWTR) – $18.34 billion
    • Macy’s, Inc. (M) – $17.29 billion
    • Bed Bath & Beyond Inc. (BBBY) – $15.91 billion

    After its first day of trading yesterday, Twitter Inc.’s shares closed at $44.90, a 73 per cent increase from the initial IPO, giving the company’s worth at the end of the day to be $31 billion. Jack Dorsey, Evan Williams, and Biz Stone, Twitter’s creators, became instant billionaires after considerable returns. The one year estimated price per share is valued at $39.98, which means $39.98 (at this rate) may be the price-per-share as the year ends.

    (image)

    According to Dealogic, a markets service, Twitter has the second largest IPO by an American company, and trails shortly behind Facebook (FB) which shares, as of this time, cost $47.56.

    As the next few days follow, Twitter will see an extraordinary amount of activity at the stock exchange, but will gradually fall down just a bit. If you’re hell-bent on buying shares, it may be wise to wait it out a little bit.

    “In a few days after the IPO, you’re going to start seeing the stock price settling down a bit,” says Global X Funds CEO Bruno del Ama.

    Thankfully as November 7th closed, Twitter’s NYSE debut didn’t result in any technical glitches like when Facebook went open to the public (and the Securities and Exchange Commission fined Nasdaq $10 million because of it) in May 2012. In late October, NYSE performed a successful test run that showed it could handle the volume of buyers when Twitter’s IPO launched.

    So how does Twitter make money?

    According to Will Oremus at Future Tense, Twitter makes it money “primarily by selling ads, which gain a lot of their value from the advertiser’s ability to target specific groups of users. Twitter’s disadvantage relative to Facebook is scale: It has on the order of 200 million users, while Facebook has some 1.15 billion. But its advantage lies in timeliness and topicality. People check Facebook casually, when time allows. Twitter users tend to use Twitter quite actively, and in conjunction with specific events, like TV shows, rallies, concerts, and breaking news. So advertisers can craft ads tailored not only to a Twitter user’s general tastes and demographic profile, but to what that user is doing at the very moment they see the ad.”

    Below is a pie chart that shows what the 200 million registered users in 2009 were posting on Twitter:

    (image)

    As of May 2013, Twitter has 554,750,000 registered users.

     

     

  • Actor Patrick Stewart Rings In Twitter IPO

    Actor Patrick Stewart joined Twitter Chief Executive Dick Costolo and founder Jack Dorsey at the New York Stock Exchange this morning, to ring in the social media platform’s IPO.

    Twitter announced yesterday via tweet that the price per share of its initial public offering had been set at $26, with an $18 billion valuation. The shares had been priced above a previous range of $23 and $25.

    Also on hand were 9-year-old lemonade stand owner Vivienne Harr, and a representative from the Boston Police Department. Harr established her “Make a Stand” movement, after seeing a photograph of two enslaved boys. She’d stood by her lemonade stand for 365 days, which ignited a crusade to end child slavery.

    “I guess I represent the poster boy for Twitter,” Stewart said, adding that he’d only been tweeting for about a year and wasn’t buying any Twitter stock.

    Stewart had been in the news of late after marrying longtime girlfriend Sunny Ozell, a singer-songwriter. The ceremony was officiated by Sir Ian McKellen, a close friend of the actor.

    One of Stewart’s best-known roles is Captain Jean-Luc Picard, on the series “Star Trek: the Next Generation,” which ran from 1987-1994.

    Incidentally, Picard kept a Lionfish named “Livingston” in his ready room fish tank, the same kind of fish that is presently tearing up the Atlantic.

    As of writing, Twitter stock is sitting at around $45 per share, up about 73%.

    Image via Twitter.

  • Square Eyeing 2014 IPO, According to Report

    Square Eyeing 2014 IPO, According to Report

    Today, everyone is talking about the big Twitter IPO. Next year, we may be talking about Square putting forth an initial public offering.

    The common thread here is Jack Dorsey, of course. The Twitter co-founder is also the founder and CEO of mobile payments company Square – a company that may be eyeing an IPO of its own.

    The report comes from The Wall Street Journal, who cites someone familiar with the matter who says that Square has already held discussions with banks, including Goldman Sachs (who’s leading the Twitter IPO) and Morgan Stanley. Although Square isn’t profitable right now (even with nearly $1 billion is sales, per source), it appears that they have a plan to turn it in the direction over the next couple of years.

    Square started with the basic Square Reader, a card-scanning device that plugged into smartphones and tablets and allowed small businesses to process payments on the go. Later, Square introduced the Square Stand, an all-purpose POS system. In the past month, the company has also entered into the realm of email money transfers with the ridiculously simple to use Square Cash.

    In the time since, Square has launched in Canada and Japan. About a year ago, Square closed a round of Series D funding from Citi Ventures, Rizvi Traverse Management, and Starbucks.

    For more on today’s Twitter IPO, check here. The initial offering was $26 a share, and as of the writing of this article the price has already skyrocketed to over $46 in its first couple of hours on the market.

    Image via Square

  • Twitter IPO: 7 Things You Might Not Know

    Twitter will go public on the New York Stock Exchange on Thursday morning. On the eve of the company’s much talked about IPO, here are seven things you might now know:

    1. If Twitter’s stock skyrockets tomorrow, it’s actually a bad thing for the company.

    According to San Francisco investment banker Bill Hambrecht, who has helped companies like Amazon, Apple and Google go public, if Twitter’s price per share rises significantly higher than its IPO price of $26 on opening day, that money’s going into the pockets of Wall Street insiders instead of flowing back into the company.

    2. There’s a reason we’re talking about MAUs.

    An MAU is a monthly active user. This number is important because many Twitter users aren’t actually active on the platform. Only about half of registered users follow two or more people. Investors want to know how many people are actually using the network, not how many are merely signed up, because of the obvious implications this has for income generation.

    3. Speaking of MAUs, Twitter is lagging behind some of its competitors.

    Facebook boasts an impressive 1.19 billion MAUs while Twitter reports just 215 million. It also lags behind Google+, which reports 300 million.

    4. Most of Twitter’s MAUs are outside the United States.

    An estimated 3/4 MAUs are outside the US, and experts caution that this could have negative implications when it comes to monetization.

    5. Some San Franciscans don’t like Twitter, and they plan to let the world know.

    A group of individuals and community-based organizations will stage a protest on Thursday, set to begin at 6:30 a.m., right when Twitter’s shares start trading on the New York Stock Exchange. They claim that the company receives unfair tax breaks, and is driving up rent in the Tenderloin and Mid-Market neighborhoods.

    In a twist of irony, the protest has been promoted on Twitter, under the hashtag #ThrownOutByTwitter.

    6. Twitter is doing its IPO a little differently than Facebook did.

    Besides being generally more low-key about it, Twitter is listing its stock on the New York Stock Exchange, while Facebook listed on the more tech-driven NASDAQ Stock Market.

    The lead banker for Twitter’s IPO is Goldman Sachs Group Inc, while Facebook went with Morgan Stanley.

    7. When it comes to privacy concerns, Twitter could potentially know more about its users than any of the other social networks.

    When you’re reading an article on a website or blog, you usually have the option to tweet it or like it on Facebook. While Facebook claims it doesn’t use its like buttons for tracking, Twitter makes no such promises.

    Furthermore, Twitter recently acquired MoPub, a start-up that will place ads within its mobile app. The combined information collecting abilities of Twitter and MoPub have the potential to create what some tech experts are calling a “digital Rosetta Stone that enables it to know who you are, wherever you are.”

    Image: Twitter (SEC)

  • Twitter IPO: $26 Per Share

    Twitter just announced via tweet that the price per share of its initial public offering has been set at $26, with an $18 billion valuation. The shares, which have been priced above a previous range of $23 and $25, will be available on the New York Stock Exchange Thursday morning.

    Twitter ipo

    The $26 IPO was debated by Twitter’s board of executives and underwriters until Wednesday afternoon, and is indicative of a high demand for the microblogging service’s stocks. Twitter raised $1.8 billion in the offering, selling 70 million shares.

    Recently, Twitter had increased its IPO price range, which had the stock potentially sitting between the aforementioned $23 and $25. This came after an earlier estimate of shares possibly going for between $17 and $20.

    Twitter said in its filing:

    Prior to this offering, there has been no public market for the common stock. It is currently estimated that the initial public offering price per share will be between $23.00 and $25.00. Our common stock has been approved for listing on the New York Stock Exchange under the symbol “TWTR”.

    We are an “emerging growth company” as defined under the federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements for future filings.

    Twitter users took to the platform, mostly concerned with the use of a low-resolution image to explain the IPO, which exceeded Twitter’s 140 character limit:

    Interestingly, grey market analysts have predicted that Twitter stock will be at $43.60 per share, by the end of Thursday.

    Image via Wikimedia Commons.

  • Defunct ‘TWTRQ’ Stock Confused with Twitter IPO

    A bankrupt company named Tweeter Home Entertainment Group Inc. (TWTRQ) saw its stock soar by 1,800% on Friday, in what analysts say some investors must have thought was Twitter. Incidentally, Twitter (TWTR) doesn’t have a “Q” on it.

    Though, the investments didn’t result in any new-sprung Tweeter Home Entertainment millionaires. TWTRQ, which went bankrupt in 2007, before finally shutting down in 2008, had shares worth about a penny. Though, the company did see its stock rise roughly 14 times it’s initial Friday price – it finished the day at .0510 cents per share, or a 684.92% gain.

    TWTRs took to TWTR to discuss TWTRQ:

    As Twitter filed for a $1 billion IPO, the company had to relay its potential risk factors in public SEC documentation. Beyond the threat from TWTRQ, Twitter noted:

    “If we fail to grow our user base, or if user engagement or ad engagement on our platform decline, our revenue, business and operating results may be harmed. The size of our user base and our users’ level of engagement are critical to our success. We had 218.3 million average MAUs in the three months ended June 30, 2013, which was a 44% increase from 151.4 million average MAUs in the three months ended June 30, 2012. Our financial performance has been and will continue to be significantly determined by our success in growing the number of users and increasing their overall level of engagement on our platform as well as the number of ad engagements.”

    Still, there will always be nonsensical TWTR fights to invest in.

    Image via Twitter.

  • Stock Market Dips Drastically After Wednesday’s High

    On Wednesday, September 18, the Dow set an all-time high at closing, as did the S&P. The boom came shortly after the Federal Reserve announced that it would continue its economic stimulus program.

    However, the investment-high did not last long. The stock saw itself losing all of its gains from Wednesday on Thursday and Friday. Economic pundits believe the dip in the market is due to uncertainty surrounding the actual strength of the market: “Investors need to take a step back and consider the idea that maybe the U.S economy is on weaker footing than we originally thought,” stated Marc Doss, regional CIO for Wells Fargo.

    Investors were surprised when Ben Bernanke announced that the Fed would continue its $85 billion bond-buying program. All signs pointed to the program being decommissioned this September. However, the Federal Reserve stated that it “decided to await more evidence that progress will be sustained” before ending the program.

    The purpose of the Fed’s bond-buyig program is to pump money into the economy to encourage people and banks to borrow and lend more money. Thus, it is a program that would need to be implemented when the market is not at its strongest. Because of its continuance, investors are wary as to current market strength, hence the drop in the stock market after the announcement.

    Companies themselves, however, seem to have much faith in the market. There have been 140 IPO’s added to the market this year, 46% more than 2012. More companies are offering IPO’s because they see promise and stability in the market. While this is generally seen as a positive sign, it does offer more risks to companies and could create a bubble situation of its own – the influx of IPO’s may start a trend which could diminish the quality of offerings and lessen peoples’ investments in said companies.

    The main concern with the Fed’s bond-buying program right now concerns the time-table as to when the Fed will feel ready to end the program:

    “Fed officials have never been able to agree among themselves what exactly would constitute the ‘substantial’ improvement in the labor market outlook that would persuade them to halt the monthly asset purchases. As a result, they have done a very poor job of communicating to the markets how improvements in the labor market should be gauged,” stated Paul Ashworth, chief US economist at Capital Economics.

    There is also the concern that the market growth the US has seen in September is the result of quantitative easing rather than actual company growth. If this is the case, many investors, such as Doug Kass of Seabreeze Partners Management, believe that the Fed has gotten itself in a situation that it can’t escape: “There is no way out for the Fed once it started the process of printing. Getting in was easy. Getting out—not so much. The Fed is trapped and can’t end tapering or else the bond and stock markets will blow up. The longer this continues the bigger the inevitable burst.”

    Then there are the other factors such as potential conflicts in the Middle East, worries over government shutdown, and the question of who will become the next chair of the Federal Reserve. In essence, nothing has changed – no one does not understand economics, and no one ever will.

    Image via Wikimedia Commons

  • Facebook and Its IPO Made San Mateo County the Highest-Paid County in America

    According to figures just released by the Bureau of Labor Statistics, Facebook’s May 2012 IPO made San Mateo county, California the most well-paid area in the country.

    The average weekly worker wage in San Mateo County, California (home to Facebook’s Menlo Park campus) was $3,240 in Q4 of 2012. That’s over a thousand dollars a month more than the second-place county, New York, NY ($2,107). It’s an increase of over 107% from Q4 2011. Overall, the average weekly wage in all of America increased 4.7%.

    That amounts to a $1,677 a week increase in San Mateo, compared to a $45 increase overal in the U.S. That average salary for San Mateo county workers comes out to $168,480.

    Of course, in the time between Q4 2011 and Q4 2012, Facebook launched their IPO. We knew it would make a bunch of Facebook employees millionaires – but we didn’t know just how massive of an effect it would have on the economy of the area.

    As you may expect, the specific industry in San Mateo County that gained the most over the past year was “computer systems design services.” That particular sector accounted for $6.8 billion of total wages in Q4 – or $82,891 per week.

    Of course, this doesn’t signify weekly take home pay. “Wages” includes things like stock and stock options.

    “That kind of a jump can only be explained by what’s happening with stock and stock options from recent IPOs. It will be interesting to see if that wealth bump is reflected in giving back to the community,” said Doug Henton of a local San Meteo consulting firm.

    Basically, Facebook’s IPO singlehandedly made one county the most well-paid county in the entire United States. Whoa.

    [via The Wall Street Journal]

  • Neiman Marcus Files for $100M IPO

    Neiman Marcus Files for $100M IPO

    Department store Neiman Marcus this week announced that it has filed for an initial public offering. According to a registration with the Securities and Exchange Commission, the offering will be in common stock sold by current shareholders. The number of shares offered, and the price range for the shares, has not yet been released. Financial services company Credit Suisse Securities is handling the offering.

    According to a Bloomberg report, Neiman Marcus is expecting to raise around $100 million during the offering, an amount that could change as specifics about the offering are finalized. The company’s owners are valuing it at around $8 billion. Neiman Marcus returned $4.5 billion in revenue over the past year.

    Neiman Marcus was founded in 1907 and is headquartered in Dallas, Texas. Though the company has had many owners over its 100-year history, it was most recently bought in a 2005 leveraged buyout by investment firms including Texas Pacific Group and Warburg Pincus. Both firms are expected to sell stock in the IPO to reduce their ownership stakes.

    (via Bloomberg)

  • Candy Crush Saga Publisher Preparing For IPO

    In the two months since its release on Facebook, Candy Crush Saga has quickly become the most-played game on the social network. With tens of millions of users, the game is raking in money through micro-transactions on Facebook and mobile platforms. Now, Midasplayer International Holding, the game’s publisher, is looking to take its success public with an IPO.

    The Wall Street Journal reported this week that Midasplayer, also known simply as King, has hired banks to prepare for an initial public offering. Some of the banks contacted include J.P. Morgan Chase, Credit Suisse, and Bank of America. There are not yet any details about a possible IPO date or initial pricing. A spokesperson for King indicated that taking the company public is just one of the options the company is considering.

    King’s rise to the top of the Facebook gaming mountain in many ways parallels that of competitor Zynga‘s. King got its first taste of casual gaming success last year with Bubble Witch Saga. Since its release just over one year ago, Candy Crush Saga has dominated mobile and Facebook gaming, making King the latest developer to find fast success in the genre.

    However, Zynga’s more recent history may temper King’s ambitions a bit. Zynga was the first of such developers to find instant success with games such as Farmville. It quickly went public, and briefly enjoyed success, putting out versions of other popular games while buying up successful developers such as Draw Something creators OMGPOP. In the past year, however, Zynga’s popularity has waned as quickly as its success was earned. The company’s earnings and stock price have plunged, and the company has announced layoff after layoff in an attempt to stay afloat. Just this month, the company shut down OMGPOP, which it paid $180 million for in March 2012.

    (via Wall Street Journal)

  • NASDAQ Fined $10 Million For Botched Facebook IPO

    To say the Facebook IPO was a disaster might be a bit of an understatement. A few days after the social network went public, reports emerged that a technical issue prevented trading and many investors lost money as the stock’s value tanked. Those same investors brought lawsuits against the NASDAQ and the SEC launched an investigation into the IPO. That investigation has now come to an end.

    The Hill reports that the NASDAQ stock exchange has agreed to pay the SEC a $10 million fine for its part in the botched Facebook IPO. It’s noted that the fine is the largest ever paid by an exchange.

    In the official report from the SEC, the commission says that investors saw a delay of 19 minutes when trading opened. That delay caused 30,000 orders to be stuck for two hours. Sure, it’s annoying, but not scandal worthy.

    What the SEC took issue with is how NASDAQ began accepting orders again after reportedly fixing its system, even as traders were still reporting issues. The commission says that the exchange initiated in trading without understanding the problem with its system, therefore violating many of its own rules. Doing so violates the Securities and Exchange Act.

    “This action against NASDAQ tells the tale of how poorly designed systems and hasty decision-making not only disrupted one of the largest IPOs in history, but produced serious and pervasive violations of fundamental rules governing our markets,” said George Canellos, a co-director of the SEC’s enforcement division.

    Most recently, Facebook itself became the target of another lawsuit in relation to its IPO in March. A shareholder accused the social network of sharing critical information about the business with key investors while leaving everybody else out of the loop.

    Facebook’s stock is down 2.49 percent today on the news. It’s currently trading at $23.50.

  • New Facebook Lawsuit, Same Old Facebook IPO Gripe

    A new lawsuit filed by a Facebook shareholder claims that the company knew about downward trends in revenue tied to increased user defection to mobile from desktop use.

    Gaye Jones says that such information was shared with key investors.

    “The defendants were unjustly enriched because they realized enormous profits and financial benefits from the IPO, despite knowing that reduced revenue and earnings forecasts for the company had not been publicly disclosed to investors,” says the lawsuit.

    This is definitely not the first time that a lawsuit has been filed with a nearly identical claim.

    Soon after Facebook’s stock price began to plummet, a flood of lawsuits poured in accusing Facebook of concealing severe reductions in revenue growth due to the increase in mobile users and Facebook’s perceived inability to monetize mobile.

    So, new lawsuit, similar complaint.

    Jones’ new lawsuit is a derivative suit, which means that the investor “seeks to step into the shoes of the company and any money recovered from Zuckerberg and others would be paid to Facebook, not shareholders.”

    Four previous derivative suits have been dismissed after a U.S. District Judge ruled that the shareholders did not own stock when Facebook allegedly deceived them before the IPO. Plus, he said that Facebook indeed “repeatedly made express and extensive warnings” about the trend toward mobile. In this case, Jones did in fact own Facebook stock since February 2012, months before the IPO filing in May.

    Back in January, Facebook stock rode an upward trend and topped $30 for the first time in nearly six months. As of right now, the price sits at just over $27.50.

    [Reuters]

  • Twitter IPO Coming by Year’s End Says Analyst

    Another analyst has weighed in the expected Twitter IPO, and he thinks that it’s going to come sooner than others have predicted.

    Sam Hamadeh, CEO of PrivCo, a New York-based private company research firm, says that we can expect Twitter to go public by the end of the year – probably the fourth quarter. He cites a “source high up at Twitter” when making this prediction.

    Here’s his rationale:

    “By the time Facebook [made its market debut], it had been formally monetizing for four years and its growth rate was slowing,” notes Hamadeh. Meanwhile, if Twitter files to go public at the end of this year, it will hit just the right inflection point, where its revenue is growing in the triple digits, from $80 or $90 million in 2011 to $250 million last year and what we expect will be $500 million in revenue in 2013.”

    Basically, Facebook waited too long and Twitter doesn’t want to make the same mistake.

    According to Hamadeh, Twitter will price its IPO at $15 billion.

    Last week, Greencrest Capital analyst Mas Wolff put Twitter’s valuation at $11 billion, saying that it was up since the Facebook IPO back in May 2012. He said that Twitter would be making preparations to go public this year, and launch the IPO some time in 2014.

    Twitter CEO Dick Costolo has been notoriously quick to douse any and all IPO fires that have been lit in the past year or so. He’s made it clear that Twitter was in no rush to go public, and that Twitter needed to be patient in the way they built the business.

    [via peHUB]

  • Twitter Valued at $11 Billion, IPO Coming in 2014 Says Analyst

    Soon after Facebook filed its documents and made its intentions to go public known, people started speculating about when Twitter would take the plunge with their own offering. In a leaked email, Twitter CEO Dick Costolo said that his company didn’t want to be public until they “have very predictable quarterly earnings growth,” and added that Twitter wasn’t “ready to be a public company for a couple years.” These private comments echoed public comments Costolo has made about being patient in the way they build the business.

    But is the time nearing for an IPO? One firm believes so. According to a report from Greencrest Capital, they believe that Twitter may being preparations to go public sometime in 2013 and the offering would come in 2014.

    Greencrest uses recent managerial shifts to back up their claim, pointing to Ali Rowghani’s move from CFO to COO, and the addition of ex-Zynga guy Mike Gupta as CFO. Also, Newsvine’s Mike Davidson is now on board as VP of design.

    Also, Twitter is undoubtedly better positioned to generate revenue than ever before as their promoted products offerings continue to expand.

    Max Wolff, and analyst with Greencrest, now puts Twitter’s projected valuation at $11 billion. He says that Twitter’s valuation is up since the Facebook IPO.

    He makes this valuation based on secondary market trading, but makes this caveat:

    “Using the secondary market for shares to mark enterprise value is a very difficult and opaque process. It is a rumor rich and special share class soup.”

    That being said, an $11 billion valuation is up a few billion from the last time we heard a valuation based on secondary markets back in July of 2011. And although $11 billion is barely 10% of the astronomical $100 billion figure we heard for Facebook when the IPO rumors began, Wolff says that Twitter’s valuation “looks better” than Facebook’s.

    A few weeks ago, Twitter announced 200 million MAUs.

    [via Forbes]

  • Facebook’s First Post-IPO Earnings Report Shows $1.18 Billion in Revenue

    Facebook’s First Post-IPO Earnings Report Shows $1.18 Billion in Revenue

    Facebook has just announced their Q2 earnings, their first since the company went public in May.

    Q2 total revenue was $1.184 billion, up from $895 million in Q2 2011. They also posted a non-GAAP profit of $0.12 a share. The figures were pretty spot-on the Wall Street expectations.

    “Our goal is to help every person stay connected and every product they use be a great social experience,” said Mark Zuckerberg, Facebook founder and CEO. “That’s why we’re so focused on investing in our priorities of mobile, platform and social ads to help people have these experiences with their friends.”

    Facebook also announced 955 million monthly active users, as well as 552 million daily active users. That’s an increase of 29% and 32%, respectively, year-over-year.

    Check out the full post below:

    Second Quarter 2012 Operational Highlights

    Monthly active users (MAUs) were 955 million as of June 30, 2012, an increase of 29% year-over-year.

    Daily active users (DAUs) were 552 million on average for June 2012, an increase of 32% year-over-year.

    Mobile MAUs were 543 million as of June 30, 2012, an increase of 67% year-over-year.

    Recent Business Highlights

    Product

    Facebook launched several new mobile products, including:

    a new Facebook Camera app for iPhone,

    an improved version of the mobile messenger app for both iOS and Android, and

    several updates to the Facebook Android app.

    Launched global App Center where users can discover relevant apps for mobile and web.

    Apple announced plans for a deep Facebook integration throughout the next version of Apple’s iOS and OSX.

    Advertising

    Expanded the rollout of Sponsored Stories in News Feed and enabled advertisers to buy Sponsored Stories in mobile News Feed.

    Facebook now has independent ROI data from more than 60 advertising campaigns using a variety of third-party methodologies like panels and marketing mix models. The results show that 70% of campaigns resulted in a return on ad spend of 3x or better, and 49% of campaigns showed a return on ad spend of 5x or better.

    Corporate

    Announced proposed acquisition of Instagram, a popular photo-sharing app.

    Entered into a definitive agreement with Yahoo! to settle all pending patent claims between the companies and deepen the companies’ current business partnership.

    Began serving users from our new data center in Forest City, N.C.

    Announced that Sheryl Sandberg, chief operating officer at Facebook, joined the company’s board of directors.

    Second Quarter 2012 Financial Highlights

    Revenue – Revenue for the second quarter totaled $1.18 billion, an increase of 32%, compared with $895 million in the second quarter of 2011.

    Revenue from advertising was $992 million, representing 84% of total revenue and a 28% increase from the same quarter last year.

    Payments and other fees revenue for the second quarter was $192 million.

    Costs and expenses – Second quarter costs and expenses were $1.93 billion, an increase of 295% from the second quarter of 2011, driven primarily by share-based compensation expense. As previously noted in the company’s initial public offering prospectus, share-based compensation expense related to pre-2011 restricted stock units (RSUs) was not recognized in advance of the initial public offering, and as a result of the initial public offering during the second quarter, the company recognized $1.3 billion of share-based compensation and related payroll tax expenses.

    Income (loss) from operations – For the second quarter, GAAP loss from operations was $743 million, compared to income from operations of $407 million for the second quarter of 2011. Excluding share-based compensation and related payroll tax expenses, non-GAAP income from operations for the second quarter was $515 million, compared to $477 million for the second quarter of 2011.

    Operating margin – GAAP operating margin was negative 63% for the second quarter of 2012, compared to 45% for the second quarter of 2011. Excluding share-based compensation and related payroll tax expenses, non-GAAP operating margin was 43% for the second quarter of 2012, compared to 53% for the second quarter of 2011.

    Income tax provision – The GAAP income tax benefit for the second quarter was $608 million, representing a 79% effective tax rate. The company reported an income tax benefit as a result of the pre-tax loss in the second quarter. Excluding share-based compensation expense and related payroll tax expenses, the non-GAAP effective tax rate would have been approximately 40%.

    Net income (loss) – GAAP net loss for the second quarter was $157 million, compared to net income of $240 million for the second quarter of 2011. GAAP EPS for second quarter of 2012 was $(0.08), largely reflecting the effect of the accounting treatment of pre-2011 RSUs, as previously noted in the company’s initial public offering prospectus. Excluding share-based compensation and related payroll tax expenses, non-GAAP net income was $295 million or $0.12 per share, compared to $285 million and $0.12 per share for the same quarter in the prior year.

    Capital expenditures – Capital expenditures for the quarter were $413 million, a 213% year-over-year increase. Additionally, $52 million of equipment was procured or financed through capital leases during the second quarter of 2012.

    Cash and marketable securities – Cash and marketable securities grew to $10.2 billion, which includes $6.8 billion in net proceeds from our initial public offering.

  • GM Could Return To The Facebook Ad Fray [Report]

    Just days before the big Facebook IPO, the company was hit with a rather embarrassing blow from another well-known American company. General Motors announced that they were yanking all of their paid ads from Facebook, saying that they weren’t sure about their effectiveness and how they fit into future marketing strategies.

    Read: Facebook ads don’t really work and we’re getting the hell out.

    That’s the takeaway that many took from the move, and it promoted an intensification of a long-standing conversation about Facebook’s monetization strategy.

    A few days later, we learned that the big ad pull may have been a more innocuous than previously thought. We learned that GM was making big advertising decisions apart from how they marketed on Facebook (like sitting out the Super Bowl next year). We also heard that Facebook even encouraged GM to utilize the free promotion that comes from promoting a page and content on their site.

    No hard feelings, then. Right? GM insisted that the big pull right before the IPO was purely coincidental. A Ford exec tweeted that Facebook ads were effective, and it’s actually just about content, innovation, and execution. Amidst the arguing over the efficacy of Facebook ads, Facebook itself was suffering a pretty rotten couple of weeks on the market and thinking about new strategies to marketing their platform as a premier place to buy ad space.

    A day before the IPO a marketing analyst for Gartner told us that, “Facebook very frequently updates its formats and releases new products, so it will have another chance to pitch to GM.”

    And according to The Wall Street Journal, that’s exactly what’s happening right now. They say that Facebook COO Sheryl Sandberg has spoken to GM CEO Daniel Akerson about the automaker coming back to big blue.

    Also, from the WSJ:

    [GM Global Marketing Chief Joel] Ewanick and Carolyn Everson, Facebook’s global sales head, met for the first time since the blowup at a June event in Cannes, France, a person familiar with the meeting said. Ms. Everson said Facebook is willing to provide GM with better data on how their ads can turn into dollars, as it has agreed to do with other advertisers, this person said. Facebook won’t provide any special treatment for GM, however.

    Sources said that GM is waiting for Facebook to prove its effectiveness.

    In the end, the $10 million the GM spent on Facebook advertising was minuscule – both to GM and Facebook, really. But, as a vote of confidence in the ability of Facebook ads to be effective, GM’s return would be good news for Facebook.

  • LivingSocial Not Going Public Anytime Soon

    In light of the totally botched Facebook IPO, it’s no wonder many tech companies are in no hurry to go public.

    According to LivingSocial CEO Tim O’Shaugnessy, you can add LivingSocial to that list. Despite recent losses for the company, they are aren’t hurting for the capital an IPO would bring in.

    LivingSocial was recently able to raise $600 million in venture capital with Amazon controlling nearly 30% of the company.

    While LivingSocial isn’t as popular as their closest competitor, Groupon, they aren’t looking to be acquired either. In fact, they invested heavily last year in ways to diversify and grow their business. Currently, Groupon is holding about 60% share of the daily deals market, and LivingSocial is holding 26%. There’s definitely room for growth.

    The Washington, D.C.-based company is expanding regardless of not finding the diversity it needs to grow in the market. The D.C. City Council, and local business professionals are working on a tax abatement for LivingSocial in order to help them expand their operation within the city and attract more top-level talent to the tech laden area.

    So while it looks like LivingSocial is joining the long list of tech companies totally off-put by the idea of going public, they have no desire to be acquired and continue to advance efforts to grow their business, and diversify their daily deal offerings.

    Facebook aside, LivingSocial need only look at Groupon, their closest competitor, to see going public isn’t necessarily a fast-track to success.

  • Mark Cuban Admits He Was Wrong About Facebook

    Mark Cuban, who has been a steadfast supporter of Facebook throughout the IPO process, and an investor who purchased 150,000 shares of the company, is coming forward today to say he was wrong about the company.

    He has decided to sell off his huge collection of Facebook shares and is now saying it just isn’t a good investment. Ouch! That has to hurt Facebook in the eyes of investors.

    Just this morning I wrote an article where Cuban offered his insight on how Facebook has what it takes to overcome the challenges ahead to become a valuable investment. Now he’s saying it’s best to get out when the gettin’ is good.

    Essentially, Cuban says Facebook just issued too many shares of stock and in the process made themselves a lot less valuable. If they would have spread themselves thin, the market for Facebook shares would look a lot different today.

    Financial guru Mark Cuban comments on his decision to sell off his shares of Facebook:

    “I already sold it, I took my hit, my thesis was wrong. I thought we would get a quick bounce just about the excitement about the stock. I was wrong, and when you are wrong you don’t wait, you just get out. So I took a beating and left,”

    “I mean if you look at other companies like LinkedIn, they issued 8.4 million shares and the stock skyrocketed. If Facebook would have come out with 8.4 million shares, instead of 421 million, the stock would be at about $200 right now. So it was just the circumstances that led to me getting in and out,”

    He also admits it’s not just Facebook, that everybody is dealing with the same problems; how to monetize advertising? Also, he believes there will be be an increase in monetizing mobile, but it’s a challenge every internet company will have to face.

    The good news for Facebook and their investors is that stock climbed to over $32 today on the Nasdaq. In fact, shares of the company have rose 20% since their $25.52 low on June 6th. We’ll see what happens.