This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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 IPO Shows It's All Just Transaction Processing

NEW YORK ( TheStreet) -- The market battle between Nasdaq and the NYSE is looking more and more like one between Visa (V) and MasterCard (MC).

First, because it seems Twitter chose to become TWTR on the NYSE due to the reliable computerized trading services that exchange provides.

Second, because the exchange is all going to be run out of Atlanta anyway.

Twitter revealed its exchange choice in an amended S-1it filed with the Securities and Exchange Commission Tuesday.

Twitter's IPO process is said to be an "anti-Facebook" one, in that it's going with a traditional process led by Goldman Sachs, listing on the older exchange, and expecting to price its shares to sell quickly, then rise immediately in value. Facebook (FB) shares, of course, fell in the days after opening and have only recently gone above the IPO price.

Lots of big institutions are listed among Twitter's shareholders. JPMorgan funds own more than 10% of the company. Rivsi Traverse has a stake of 17.9%. Venture capitalists Union Square Ventures, Spark Capital and Benchmark Capital Partners all have more than 5% each.

But when looking at the financial statements, this is also anti-Facebook in that it is a dead money loser. Twitter is showing a loss of $133 million on revenue of $422 million for the first nine months of 2013, against a loss of $70.7 million on revenue of $204.7 million for the same period a year earlier.

The company's research expenses more than doubled over the period to nearly $200 million, and its marketing costs went from less than $58 million to almost $140 million. It did manage to show operating cash flow of almost $4.27 million this year, however.

It was the computer glitches marking the Facebook IPO, the failure to match buyers and sellers for hours, that are said to be at the heart of Twitter's choice of the NYSE. It shows that the exchanges are really just transaction processors.

So it's fitting that before the Twitter IPO process is completed, around the middle of next month, that the NYSE itself will be owned by an Atlanta transaction processor, InterContinental Exchange (ICE - Get Report), which is based just a few miles up I-285 from credit card processor First Data. That deal is due to be complete on Nov. 4.

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
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

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
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!
SYM TRADE IT LAST %CHG
ICE $231.98 0.00%
AAPL $123.25 0.00%
FB $83.30 0.00%
GOOG $548.34 0.00%
TSLA $185.00 0.00%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

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