No date or indicative price rage has yet been given, but private investors already value the social network at somewhere between 10 billion dollars and 15 billion dollars.
The filing is under America’s JOBS Act, which allows companies with less than a billion dollars in revenue to make an initial confidential filing that only the Securities Exchange Commission can see.
“This JOBS Act was introduced in 2012 and it was to induce companies to actually start listing on the stock market. It’s an initiative by President Obama to really kick-start the stock market. IPOs were low for the last four years given the economic downturn in the US and across the world,” ETX Capital market strategist Ishaq Siddiqi told CNBC Africa on Friday.
“Many companies were not feeling too confident about listing at times of economic uncertainly. However we have some certainty back on board, there is a bit of a recovery in place, particularly in the US and also signs in the Eurozone and also in China.”
Since the law was implemented, the number of companies making confidential IPO filings has surpassed those submitting public filings.
“When it comes to a corporate like Twitter, who intend to float on the market, the time is right now. I think for Twitter more so than anything else is that they don’t want to replicate the mistake of Facebook, which is essentially going on a road show and not really telling your investors what you’re doing with the company, how you’re going to monetise the business, and how you’re going to expand the business,” Siddiqi explained.
According to Siddiqi, Facebook co-founder Mark Zuckerberg was significantly involved in the pre-listing of the social network, unlike Twitter’s Jack Dorsey, who has taken a much lower profile towards Twitter’s listing.
“Management at Twitter right now is somewhat divided, I think, on how to push this, which is why it’s taken so long to get on board. From what I understand, you need around 2,000 private investors to back you before the company is forced to float on the market,” he said.
Twitter have managed to keep details of the listing concealed, and they do not have to reveal how they intend on running their operations for the next 21 days, which is under the JOBS Act.
The company will thereafter be highly pressured to give more detail on their operational aspects alongside the listing and most importantly on its future regulation plans, which is a big concern on the market as Twitter is an unregulated space.
“I think Twitter’s going to take more of a prudent low-key profile approach when it comes to the IPO and I think they’re probably going to announce it before the end of the year,” said Siddiqi.