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.
The company's explosive revenue growth would have likely created a scenario in 2014 that pushed Twitter outside of the requisite $1 billion revenue threshold to utilize the JOBS Act, sources suggest. Consider: Its revenue grew from $100 million in 2011 to more than $300 million in 2012; this year, it is on pace to rake in more than $500 million. Given Twitter's international ambition and increasing stickiness in pop culture and on mobile devices, it is likely the company's advertising revenue alone -- up to $950 million next year -- could exceed the requirement in the JOBS Act that companies using the legislation make no more than $1 billion in annual sales. Still in a growth stage that could be classified as nascent, the micro-messaging company's IPO comes at a point in its history where it could grow its user base by an exponent, like Groupon or Zynga ( ZNGA). Unlike both those companies, which suffered as a direct result of the requirement that initial IPO paperwork be publicly revealed, Twitter's month-long grace period allowed it to craft privately what CEO Dick Costolo must expect is a wholly genuine, factual picture of its business lines. And the company's performance for its next investors will ultimately be held up as a mirror for the legislation President Barack Obama signed in 2012, as well as for Twitter, Congress and the White House. And, while Washington might not be the best model for innovation right now, Costolo clearly hopes that investors believe Twitter will continue down that path. Goldman, Sachs & Co., Morgan Stanley, J.P. Morgan, Bank of America Merrill Lynch and Deutsche Bank Securities are listed as joint underwriters on the offering. -- By Jonathan Marino