SAN FRANCISCO – Documents on Twitter’s initial public offering suggest a valuation of $12.8 billion for the microblogging service, underscoring the seven-year rise of a still-unprofitable company that has helped revolutionize how people share information.
In the most anticipated technology offering since Facebook, San Francisco-based Twitter made public its S-1 prospectus Thursday and said it’s seeking to raise $1 billion. Twitter pegged the fair value of its common stock at $20.62 a share.
There are 620 million shares outstanding, according to people familiar with its financials, who asked not to be named because the number was not included in the filing.
The prospectus removes the veil of secrecy that surrounded Twitter’s financials since the company said Sept. 12 that it had filed confidentially for an IPO.
It shows how the microblogging service, founded in 2006, has evolved from a simple site for 140-character updates to a booming online-advertising business that generated revenue of $253.6 million in the first six months of this year.
Whether it’s worth $12 billion or not is really going to come down to how they can embrace this real-time news and information vision, how they can extend it to other revenue lines and how they can grow around the world, said Brian Blau, a San Francisco-based technology analyst at Gartner Inc.
At $12.8 billion, Twitter would be valued at 28.6 times revenue over the past 12 months. Facebook debuted with price-to-sales ratio of about 26, while LinkedIn sold shares for 14.5 times revenue.
Twitter’s revenue in the first six months of the year more than doubled to $253.6 million. The company said advertising revenue per timeline view in the second quarter rose 26 percent from the same period a year ago to 80 cents.
In the three months that ended in June, more than 65 percent of Twitter’s ad revenue was generated from mobile devices. Facebook said in July that mobile accounted for 41 percent of revenue in the second quarter, up from 30 percent the prior period.