Friday, 4 October 2013

Twitter valued at $10bn as it aims to raise $1bn in IPO -

As Twitter's S-1 made clear, it does not come without risks. Twitter had 218m users in June, but its S-1 documents warn would-be shareholders that they could fall away if Twitter is eclipsed by some newer, more fashionable social network.

Growth would slow if "users engage with other products, services or activities as an alternative to ours", it said, adding that "influential users, such as world leaders, government officials, celebrities…or certain age demographics [could] conclude that an alternative product or service is more relevant".

The service, which allows users to post messages 140 characters at a time, also warned that it could run into trouble if adverts carried on the website became annoying; if people worried that their privacy was being compromised; or if too many users cluttered the co-called "Twittersphere" with pointless commentary.

Growth would slow if "there is a decrease in the perceived quality of the content generated by our users", the company said.

Jack Dorsey, the technology entrepreneur who co-founded Twitter, but no longer has an executive role, will receive a windfall thanks to his 4.7pc stake in the business. However, he is far from the biggest beneficiary after years of having his shares diluted by additional investments.

According to the S-1, he is outflanked by his co-founder Evan Williams, who holds a 12pc stake, and Peter Fenton, a partner at Benchmark Capital, one of the firms early investors. Mr Fenton owns 6.7pc of the social media business.

Twitter's chief executive, Dick Costelo, who is paid just $14,000 a year, holds 1.6pc.

The filing does not mention Suhail Rizvi, founder of New York private equity firm Rizvi Traverse Management, who has quietly bought up more than 15pc of the company over the past two years using a number of different investment vehicles.

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