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What Twitter's IPO filing reveals: Inside Scoop

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Inside Scoop: What Twitter's IPO filing reveals

3:46 /

The filing is in. The numbers are out. Twitter's IPO filing to the SEC gives the public the first detailed look at its financials and shows that the company is still not profitable. But is it better positioned than Facebook was prior to its IPO? CNET's Sumi Das and Daniel Terdiman have the Inside Scoop on this highly anticipated public offering.

-Hello, and welcome to Inside Scoop. I'm Sumi Das. Joining me is Daniel Terdiman, senior writer for CNET-- Daniel, thanks for being with us. -My pleasure. -Okay, so it is now official. There is going to be an IPO for Twitter. We had expected this. -Yes. -The paperwork has been filed so they have filed what's called an S1-- -That's right. -with the SEC that happened today-- -Yes. -and now we know things that we didn't before. What's going on with the financial health of Twitter? -Well, Twitter has yet to ever make a profit, but their revenues are now in the range, I might say, of about it looks like $500 million for a full-- for the full year of 2013 extrapolating a little bit, but-- -Right. -and the revenues are going up pretty, you know, that's a healthy rise in revenue. -Let's talk about mobile because mobile is such an important aspect-- -Right. -of Twitter, of this business model. How was Twitter set up to really capitalize on mobile and take advantage of that? -Well, Twitter, you have to remember was started as a service that was tied to carriers, text messaging system which is-- -Its roots were really-- -yeah-- -in mobile, yeah? -that's why in Twitter the maximum length of 140 characters that was tied to, you know, what you can do in a text message. So, from the beginning it's been built as a service for mobile and that's played out or that's represented in the fact that, they say, 75 percent of their active users, you know, do it on mobile, 65 percent of their advertising revenues comes from mobile-- -Okay. -and if you compare that to what Facebook did when-- you know, after their IPO, they really struggled to figure out how to make money from mobile. -Right. They've only recently kind of nailed that down and gotten their mobile business in order really this year, right? -Yeah and that's wh-- -it's the primary reason why Facebook's IPO kinda tanked for the-- -Yeah. -first, you know, 6 months or so, and now that they have figured out mobile why Facebook is now sort of a back above with their-- with their IPO price list. -Right, they've gone above the original price. So really, Twitter, it seems like it's set up in a good position then. Other comparisons between and Facebook, of course, that's the most recent sort of IPO in history. They are considered competitors. How did-- how did they compare, I mean, we know that Twitter has far fewer users, monthly active users than Facebook does, correct? -Right. So, Facebook [unk] recently said they had I think like 1.18 billion monthly users by comparison, Twitter, which has at about 218 million-- -So really a fraction. -so that's only for 1/6-- 1/6. -Yeah. -And there's even a larger gap in terms of revenue. It seems like Facebook is making like 10 times as much money in revenue and they have-- they're already profitable first. Twitter has yet to ever make a profit. -Right. And what is Twitter trying to accomplish? I mean, it's a pretty lofty goal here, it's a billion dollars right, for the IPO? -Although, if you think about it, a billion dollars for an IPO doesn't seem like that much anymore. I mean, like I think Facebook-- -Well-- -if I remember, they tried to raise 10 billion in there or 15-- -Right. -billion in there. -Right, but if the IPO goes the way of Facebook, which I'm not saying that it will, but it's possible, right? Anything's possible. -So one would think that Twitter with their billion dollars is going to expand pretty significantly, in fact, there has been rumors in the last day or so that they're looking at a-- at a lease and then a new space since--ever since they have double the amount of size that they have. -And they've just moved in to their new headquarters. It seems to me-- -It's been about a year. -not that long ago, yeah. -Yeah, it's been about a year. So if that's true, then they're looking to double, at least double the size of their workforce. They'll probably acquire more companies, filling, you know, some more holes. -So and then the final question is, when is this IPO gonna happen, when can everybody actually buy shares on Twitter? -Oh we don't know exactly yet, but we can imagine it'll happen, you know, by next month for sure. -All right, okay. Daniel, I'm sure this is not the last that we'll be hearing of the-- -Right. -Twitter IPO. We'll probably be turning to you again for news. Thanks so much. -My pleasure. -For Inside Scoop, I'm Sumi Das. Thanks for watching.

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