By Gerry Shih and Olivia Oran
SAN FRANCISCO Oct 15 Twitter Inc
revealed on Tuesday a tripling in quarterly losses as it
prepares to list on the New York Stock Exchange in one of the
year's most anticipated IPOs.
The online messaging service's decision to go with the older
exchange deals a blow to the tech-heavy Nasdaq, which bungled
Facebook Inc's 2012 offering. Twitter is now expected to
kick off its investor roadshow on Oct. 28 where it will pitch
its offering to Wall Street before shares start trade in
mid-November, two sources familiar with the situation said
In an amended IPO filing on Tuesday, the eight-year-old
company showed that it sustained its recent pace of revenue and
user expansion in the latest quarter ended Sept. 30 - even
though its losses continued to widen.
Among the biggest winners of a successful IPO would be
co-founder Evan Williams with a 12 percent stake. Rizvi
Traverse, run by Hollywood and Silicon Valley financier Suhail
Rizvi, and its affiliates hold 17.6 percent, as the largest
institutional holder. JPMorgan Chase's alternative asset
management arm holds another 10.3 percent, the filing revealed
for the first time. CEO Dick Costolo, an early angel investor,
owns 1.6 percent.
Rizvi and his investors, who obtained their shares with the
help of Silicon Valley investor Chris Sacca, paid more than $1
billion for their stake, Reuters reported in October.
Other major stakeholders include Spark Capital and Benchmark
Capital, which own 6.8 percent and 6.6 percent of the company,
respectively. Union Square Ventures owns 5.9 percent.
Twitter's debut will be the culmination of a journey from
side-project to sociocultural phenomenon, one that has become a
communications channel for everyone from the Pope to President
The company more than doubled its third-quarter revenue to
$168.6 million. But net losses widened to $64.6 million in the
September quarter compared with $21.6 million a year earlier.
And in the three months ended September, Twitter grew its
monthly active users 39 percent to 231.7 million on average.
That figure was up from about 218 million when the company first
disclosed its IPO filing on Oct. 3.
Those losses were driven partly by a 158 percent surge in
sales and marketing spending, as the company ramped up its sales
forces in offices around the world to push its advertising
platform. Sales and marketing costs rose to $61.2 million from
$23.7 million a year earlier.
Twitter said its revenue is increasingly coming from mobile
devices, the preferred way for most users to log on. In the
three months ending through September, over 70 percent of
advertising revenue came from phones and tablets versus 65
percent in the prior quarter.
Twitter represents the latest loss for Nasdaq OMX Group
in recent years. The NYSE Euronext's aggressive
campaigning helped snag LinkedIn Corp and Pandora Media
Inc, amongst other high-profile consumer-tech debutantes.
Both bourses vied fiercely for the prestige of hosting
Twitter. But analysts had predicted that Facebook's debut,
marred by a series of technical glitches that delayed the start
of trading, could weigh against the Nasdaq.
Nasdaq CEO Robert Greifeld flew to Twitter's San Francisco
headquarters as recently as Oct. 4 to make one last unsuccessful
pitch for listing on his exchange, a person close to Twitter
"This is a decisive win for the NYSE. We are grateful for
Twitter's confidence in our platform and look forward to
partnering with them," said Scott Cutler, head of NYSE's
In a statement, the Nasdaq said it "wished Twitter well."