This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Twitter Favorites the Jobs Act, For Now

NEW YORK ( TheStreet) -- Twitter's tweet about its expected initial public offering shook up Twitter late Thursday afternoon.

But the company's 140-character admission of what many Silicon Valley VCs and the markets have been craving for months wasn't timed to coincide with Facebook's (FB) resurgence in its stock, as some market pundits speculated.

It was likely timed to make the most of the Jobs Act, and to provide Twitter as much privacy and time as it needs pre-IPO. The Jobs Act only applies to companies with revenues under $1 billion.

Which means that Twitter, which several sources said would likely top the $1 billion revenue threshold by next year, wouldn't be able to take advantage of the new law.

Industry sources also previously told The Deal that the company's market capitalization is likely to be between $12 billion and $15 billion.

So far, Twitter's progression toward public markets appears to be taking lessons from its predecessors.

For years, the company fought to curtail unrestricted trading of its stock on secondary markets, like SharesPost and Secondmarket The startup did this by raising massive amounts of capital, some of it not actually used for operations, but for maintaining its capital structure.

It accomplished this through "Right of First Refusal" agreements that many of its investors -- but not all -- agreed to as part of its venture capital rounds. (Twitter's earliest VC rounds were not subject to these stipulations, which allowed for limited out-of-control secondary market trading.)

Facebook, which did next to nothing to curb secondary market trading of its stock, was helpless as its valuation grew like kudzu, and its bankers fueled the fire by jacking up its share price and float size during its road show. This was a significant factor leading to the company's poor performance in the initial months after its IPO.

After the IPO, Facebook underwhelmed with product announcements. Shareholders were left perplexed, and perhaps disappointed, when there was no new phone being developed by the social network -- after a flood of rumors.

With Twitter, sources say, this won't be the case. Other than ad revenue, industry insiders said they expect Twitter to add new verticals. Its hiring of former Ticketmaster Entertainment CEO Nathan Hubbard, for instance, is a sign that Twitter could get into live events ticket sales, putting them on a collision course with Live Nation and Eventbrite.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,265.99 +109.14 0.64%
S&P 500 2,011.36 +9.79 0.49%
NASDAQ 4,593.4250 +31.2360 0.68%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs