San Francisco, Oct. 16 (Reuters): Twitter Inc revealed on Tuesday a tripling in quarterly losses as it prepares to list on the New York Stock Exchange in one of the year’s most anticipated IPOs.
The online messaging service’s decision to go with the older exchange deals a blow to the tech-heavy Nasdaq, which bungled Facebook Inc’s 2012 offering. Twitter is now expected to kick off its investor roadshow on October 28 where it will pitch its offering to Wall Street before shares start trade in mid-November, two sources familiar with the situation said on Tuesday.
In an amended IPO filing on Tuesday, the eight-year-old company showed that it sustained its recent pace of revenue and user expansion in the latest quarter ended September 30 — even though its losses continued to widen.
Among the biggest winners of a successful IPO would be co-founder Evan Williams with a 12 per cent stake. Rizvi Traverse, run by Hollywood and Silicon Valley financier Suhail Rizvi, and its affiliates hold 17.6 per cent as the largest institutional holder.
JP Morgan Chase’s alternative asset management arm holds 10.3 per cent, the filing revealed for the first time. CEO Dick Costolo, an early angel investor, owns 1.6 per cent.
Rizvi and his investors, who obtained their shares with the help of Silicon Valley investor Chris Sacca, paid over $1 billion for their stake, Reuters reported in October.
Other major stakeholders include Spark Capital and Benchmark Capital, which own 6.8 per cent and 6.6 per cent of the company, respectively. Union Square Ventures owns 5.9 per cent.
Twitter’s debut will be the culmination of a journey from side-project to sociocultural phenomenon, one that has become a communications channel for everyone from the Pope to President Barack Obama.
The company more than doubled its revenue to $168.6 million in the September quarter. But net losses widened to $64.6 million compared with $21.6 million a year earlier. Those losses were driven partly by a 158 per cent surge in sales and marketing spending, which rose to $61.2 million from $23.7 million a year earlier. Twitter grew its monthly active users 39 per cent to 231.7 million on an average in the quarter.
Twitter said its revenue is increasingly coming from mobile devices. In the September quarter, over 70 per cent of advertising revenue came from phones and tablets versus 65 per cent in the prior quarter.
Twitter represents the latest loss for Nasdaq OMX Group in recent years. Both the NYSE and Nasdaq vied fiercely for the prestige of hosting Twitter. Nasdaq CEO Robert Greifeld flew to Twitter’s San Francisco headquarters as recently as October 4, a person close to Twitter said. “This is a decisive win for the NYSE,” said Scott Cutler, head of NYSE’s listings business.
In a statement, Nasdaq said it “wished Twitter well”.