Twitter’s Secret IPO Estimated To Be Worth $15 Bn at 30x of $500 Mn Revenue

Micro blogging site Twitter, with over 200 mn users, has filed for a confidential IPO according to a Tweet from the company’s official account. While the company did not disclose further details, analysts estimate the IPO to be of nearly $15 bn.

Twitter IPO
Twitter announces IPO in a Tweet

Market research firm PrivCo said in a statement

We expect Twitter to price more modestly for its IPO than Facebook, with shares floating at a 30x Revenue multiple, on an estimated $500 million in revenues for 2013.

PrivCo estimates that Twitter generated $245 million in revenue in 2012, up 75% over 2011’s $139 million. Twitter’s revenue should double again to over $500 million in 2013, with its preliminary S-1 filing showing 2 full quarters of its new monetization efforts working beautifully, the firm said.

Twitter's Estimated Revenues
Twitter’s Estimated Revenues

According to another report, Twitter has been valued by private investors at over $10 bn and is likely to post $583 mn in revenues this year. Buzzfeed president Jon Stienberg estimates that the IPO could be worth $10- $20 bn.

What is a confidential IPO?

As we’d explained in an earlier story, a confidential IPO is a new mode of filing for an IPO without having to publicly disclose the fact that a company is doing so. The Jumpstart Our Business Startups (JOBS) Act  passed by the Obama administration in 2012 makes this possible. According to the act, companies with less than $ 1 billion revenues, do not have to make public the IPO plans until 21 days before its roadshow begins. The number of Public IPOs since the JOBS act have come down while “secret” or “confidential” IPOs have been on the rise.

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