Twitter IPO -- A Tweet That Made History
In September of 2013, Twitter announced, using as few characters as possible, it would file an initial public offering. The move isn’t exactly surprising. Twitter has been experiencing rapid growth since its introduction into the world of social media. Today, the company estimates its more than 200 million Twitter users send out close to 400 million tweets each day. The IPO was the next logical step in the progressive growth of this SMS based service.
A Little Twitter History
It started when Jack Dorsey, a board member at podcasting company Odeo, came up with an idea to use SMS services to send out short bursts of text. Dorsey himself sent the very first one on March 21, 2006. At the 2007 South by Southwest Interactive conference, promoters put up two 60-inch plasma screens to stream nothing but Twitter messages to showcase the service. Since the initial tweet from Dorsey – “just setting up my twitter” – went out over the airways, the company has seen massive expansion.
– In 2010, Twitter acquired Atebits, an application developer that made the award-winning app Tweetie. Later that same year, they rolled out a redesigned version of their website with picture and video posting. By 2011, they had fully phased out the old Twitter system.
– Partnership with Russian search index Yandex in 2012 gave the site a real-time news feed.
– October 2012 – Twitter bought video clip company Vine. In 2013, they released it as a standalone app that lets users create 6-second videos to share on their Twitter feeds.
– In April of 2013, they began producing a music app for iPhone.
The growth pattern for Twitter continued in 2013 as they acquired Trendrr and MoPub. Twitter had gone from being an SMS message service to a company that employs over 2,000 people.
First Day of Twitter Trading
After the announcement went out that Twitter would make an IPO bid, the company released a 800-page prospectus giving the details. They needed to raise 1 billion dollars to back up their stock market introduction.
The initial speculation was the company would list on the NASDAQ exchange, but Twitter quashed the rumors by posting to NYSE instead. On November 6, Goldman Sachs underwrote 700 million shares of Twitter stocks at 26 dollars each. By the end of the first day, those shares were worth 44.90 dollars placing the company’s valuation at around 31 billion USD.
The Pay Off #Twitter
The founding fathers of Twitter did well with the IPO, as expected.
Jack Dorsey – Chairman – 1.05 billion dollars
Evan Williams – former CEO – 2.56 billion dollars
Dick Costolo – CEO – 345 million dollars – it is worth mentioning that Costolo is not one of the original members from Odeo. He came over from Google in 2009.
It is fitting that Twitter chose to announce its IPO filing in a tweet. It is, after all, the style that made them who they are today. They followed the message with a second one telling everyone to get back to work.