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Twitter Meeting With Banks Ahead Of Expected IPO Filing


The NY Post is

reporting that Twitter executives are meeting with a host of Wall Street firms to decide who will take it to the IPO prom. Apparently, these are very preliminary meetings to communicate basic considerations and concerns to the banks.

The article suggests that Twitter’s thinking about its IPO is being substantially shaped by the experience of Facebook. Twitter CEO Dick Costolo and company want a “lower profile” IPO that doesn’t become overheated and subsequently disappoint investors as Facebook’s did (though the latter has now recovered).

The Post says:

JPMorgan Chase, Goldman Sachs, Morgan Stanley, Citigroup, Bank of America, Credit Suisse and others will be jockeying to score a role in the much-anticipated offering. These early discussions are intended for the banks to get an early feel for what Twitter is aiming to accomplish in its IPO so they can better craft sales pitches, sources said.Twitter’s executive suite — comprising CEO Dick Costolo, operations chief Ali Rowghani and newly appointed finance chief Mike Gupta — have shared a few concerns with the bankers.Among them, the 7-year-old San Francisco tech company wants an offering that’s “low profile,” one source said.

It will be next to impossible for Twitter’s IPO to be “low profile.” And if the company decides to make only a relatively small number of shares available, that will fuel demand, creating a kind of frenzy that will draw more attention and boost prices.

One of the things to look forward to is the filing of the customary S-1 form and the corresponding disclosure of revenues and related information. We’ll get a great look inside Twitter’s business, which has thus far only been subject to informed speculation.

According to third party data Twitter’s shares to date have been valued at roughly $20 on the private market. That would go up with an IPO undoubtedly. Revenue estimates for Twitter this year are more than $500 million and more than $1 billion (per eMarketer) in 2014, when the IPO would likely take place.

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