Twitter made and quickly rescinded a job posting this week that has market watchers more confident than ever that the company is planning an IPO in the near future.
On Tuesday, the company put out a job posting on LinkedIn calling for applications for a Financial Reporting Manager based out of San Francisco. Duties included writing various financial reports, including "Form S-1 when we are ready to go public," the ad said.
An S-1 form is a financial document that U.S. companies file with the Securities and Exchange Commission in New York as part of the formal IPO process.
The posting was quickly deleted, but set off a new round of speculation that the California-based company is in fact planning to go public in the near future.
"Everything I've seen lately follows the timeline of a filing in October or November followed by an IPO early in 2014," said Sam Hamadeh, CEO of PrivCo, a N.Y.-based company that monitors privately held companies before they go public.
$18 billion valuation
Twitter is bound and determined not to make the same mistakes as Facebook did in its disastrous IPO in May 2012, Hamadeh says. After selling shares to the public for $38, Facebook tanked on its first day of trading and didn't recover until yesterday, when the shares briefly traded above their IPO price for the first time. Facebook shares were worth as little as $18 at one point.
Among Facebook's many mistakes in its IPO was timing, Hamadeh says. "You want your last quarter before filing to be the strongest one, that's the goal," he said.
Seasonally, as an advertising-based business, Twitter's numbers are likely to look their best in the fourth quarter of the year, when businesses ramp up advertising to catch holiday-related consumer spending. "They're not exactly the New York Times selling Christmas ads to Macy's, but they're seasonally strong late in the year," Hamadeh notes.
Companies going into an IPO typically want to show growth of between 90 and 100 per cent, something Facebook didn't do in part because of disastrous timing. Twitter is probably growing in the triple-digits and is on track to take in $1 billion US this year, Hamadeh estimates.
As for a valuation, he's expecting Twitter to sell off a small slice of itself in an IPO that would value the whole company around $18 billion US.
"Everything's been leading to the first quarter of next year and we're on track for that timeline," Hamadeh said.
Twitter isn't formally responding to media requests for comment on their IPO plans, or the recent job posting.