Twitter picks NYSE for IPO even as losses widen

Wed Oct 16, 2013 4:36pm EDT
 
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By Gerry Shih and Olivia Oran

SAN FRANCISCO (Reuters) - 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 October 28 where it will pitch its offering to Wall Street before shares start trade in mid-November, two sources familiar with the situation said Tuesday.

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 September 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 Barack Obama.

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.   Continued...

 
A worker tends to the lawn on the roof of Twitter headquarters in San Francisco, California October 4, 2013. REUTERS/Robert Galbraith