Twitter building

Twitter, the popular micro blogging company confirmed the filing of its initial public offering (IPO) with the Securities and Exchange Commission via tweet. Analysts and investors as well as the media covering the technology industry had been anticipating the company’s announcement regarding its plan to take the company public.

Over the past several weeks, the micro blogging company had been very quiet regarding its planned IPO. During the TechCrunch Disrupt conference, Twitter’s CEO, Dick Costolo avoided answering questions regarding the issue, which strengthens speculations that the company will soon submit its application with the SEC.

Twitter has more than 500 million  registered users as of last year. The company has 200 million active users sending approximately 400 million tweets (messages of 140 characters or less and sometimes accompanied by pictures, videos and links). Its service is regularly used not just by ordinary people but also governments, corporations, executives, and celebrities to engage with their target audience, customers, fans, family and friends.

Research firm, eMarketer estimated that Twitter will be able to generate around $583 million this year. On the other hand,  Max Wolf of Greencrest Capital projected that Twitter will experience 40% annual growth rate, which means the company will be able to reach $1 billion revenue.

Private investors estimated that Twitter’s valuation is approximately $10 billion. Investment management firm, BlackRock (NYSE:BLK) valued Twitter at $9 billion after purchasing $80 million worth of shares from the employees of the micro blogging company early this year. Twitter is trading its shares in the private secondary market.

Twitter is among the companies with less than $1 billion in revenue that took advantage to file a confidential public offering under the Jumpstart Our Business Startups (JOBS) Act signed by President Barack Obama in 2012. The law eased some of the regulations related to the process of IPO and raising capital. Under the law, companies have 21 days not to disclose some of the details of its public offering before launching an investor campaign.

Two days ago, Twitter announced its agreement to acquire MoPub, a mobile advertising exchange startup for $350 million in stock. The acquisition is part of its strategy to boost its advertising revenue as users shift to mobile. The company’s move prior to its public offering demonstrates that it does not want to suffer the same consequences endured by Facebook Inc (NASDAQ:FB) after going public last year. Facebook’s stock declined significantly partly because of the controversial technical glitch, but mainly because investors became concern regarding its ability to implement strategies that would increase its mobile advertising revenue.

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