This Day On The Street
Continue to site
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

The Deal: Case Study for the JOBS Act -- Twitter IPO

NEW YORK ( The Deal) -- Congress' latest inability to get its act together to legislate, makes it all the more ironic that Twitter's IPO paperwork was released during the Capitol Hill shutdown. That's because the company's earnings and international projections show that, in order to take advantage of the Jumpstart Our Business Start-ups Act -- shortened to a Twitter friendly JOBS Act -- to go public, Twitter had no choice but to file in 2013.

Twitter, the micro-messaging company based in California, unveiled its S-1 Thursday, Oct. 3, after earlier saying that it had filed with the Securities and Exchange Commission confidentially, something allowed under the JOBS Act.

One critical missing piece of information was the company's choice of which exchange it will list on, the New York Stock Exchange or the Nasdaq, although its ticker symbol of choice is TWTR.

And, as Twitter took one of the final steps to bring it to public markets and international growth, the $1 billion offering showcased strengths and weaknesses that served as a reminder of why Congress passed the JOBS Act in 2012.

Twitter's history to date shows that, even more so than Facebook (FB), the company is still in its earliest stages. Rather, where the company is in terms of its maturity is comparable to Groupon (GRPN), the Chicago-based start-up that after a series of fits and starts during its registration, sunk on public markets, erasing billions in market cap.

Twitter became EBITDA profitable in the third quarter of 2012, more recently its fourth-quarter margin was 16%.

A whopping 87% of its $253.6 million in first-half revenue comes from advertising, although events sales and app retailing are potential future business verticals for Twitter, sources previously said.

Twitter is also eyeing multiple international markets for expansion, and because of its newly cemented status in pop culture, the company said in its filing that it anticipates a better rate of growth in places like Saudi Arabia.

Even if its attempts to monetize lines of business outside of its ad network are not successful, the company's international growth prospects should aid its advertising sales. With 215 million active users monthly, Twitter is poised to add hundreds of millions more overseas.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
TWTR $14.73 -0.87%
AAPL $95.03 -2.90%
FB $116.73 7.20%
GOOG $691.02 -2.10%
TSLA $247.54 -1.60%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs