Twitter is taking a different path en route to its IPO. This may become the path that many others after it would follow, especially in this day and age of excessive sharing through social media.
Yesterday, the microblogging service sent out a 24 word message or tweet announcing the move to confidentially file an application to undertake an IPO with the US Securities and Exchange Commission. The message did not provide financial details nor a time frame.
Twitter filed under the JOBS Act or Jumpstart our Business Startups which was signed last year. This law allows companies with less than USD1 billion in annual revenue to keep their information away from its competition until they start promoting the offer. This is what many others such as Airbnb Inc, Box Inc, DropBox Inc and Square Inc would utilize in their own IPOs.
Under the rules of emerging growth companies, the review process of Twitter with the SEC would be confidential until 21 days before it markets the stock through roadshows. The JOBS Act essentially simplified the IPO process for smaller firms, making it less cumbersome and expensive to go public. On the average, firms spend USD3.7 million on their IPOs over and above the underwriter fees, according to a report by PriceWaterhouseCoopers LLC.
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