Twitter's IPO Filing: What It Means

Calm down, Internet: Twitter is not going public just yet, nor any time in the next month or so at the very least. The company has filed a "confidential" S-1 IPO with the SEC, meaning it signaled its intent to go public at some point and is getting its paperwork ducks in a row.

Why is the filing confidential? So-called "emerging growth" companies are allowed to so that now, according to the Jumpstart Our Business Startups (JOBS) act signed into law last year.

See also: How Much Is Twitter Worth?

JOBS allows you to file so-called "black box" registration documents with the SEC if you have less than $1 billion in annual revenue. (We never believed Twitter to have more than that number coming in.)

You have to reveal the filing 21 days before starting any kind of "road show" to large investors. Until then, you don't even have to tell anyone that you filed. In theory, this allows companies to pull their IPO documentation if the response is tepid, and no one will be any the wiser.

So why reveal it at all? Twitter must have reckoned that word would leak at some point. Better to get ahead of the story — and there's no better way for Twitter to trumpet the power of its service than to reveal the news in a tweet.

Did Twitter actually file the confidential document today? Not necessarily. It looks like the tweet in question was carefully worded to not give any kind of time frame. This could have been done weeks back — perhaps back when a company spokesperson used nothing but an ellipses, which have now become Twitter-famous, to respond to a reporter's question about IPO rumors.

When will the IPO happen? That's anyone's guess. Facebook announced its IPO filing in February 2012 and went public in May 2012. If Twitter were on that kind of schedule, you should expect a launch in December.

But the holidays wouldn't be the best time to launch a company. (Yes, Zynga and Groupon launched around then, but that kind of proves the point.) Squeezing in the investment road show between three weeks from now and Thanksgiving would be tight. Furthermore, Facebook isn't exactly a model for how to do an IPO right. We wouldn't be surprised if Twitter takes a little more time to do it right and launches in early 2014.

UPDATE: Fortune is reporting a "source close to the company" said to expect the S-1 filing to go public in the next few weeks, which does in fact put us on track for a December launch.

How much will it be valued at? Again, that's very speculative. In January, one analyst said the company was worth $11 billion. More recently, sources inside the company told GigaOm that hedge funds had tried to buy the company outright — for around $14 billion, or around $27 a share. Don't be surprised if Twitter prices its shares below that.

What should we look for in the S-1 filing? Whenever it is unveiled, the big question is revenue, and how far under a billion dollars it is (analysts are guessing it's in the $500 million range). Just as important: where that revenue is coming from.

Twitter CEO Dick Costolo has said that the company makes more money via mobile apps than it does from advertising on the web, which gives it a leg up on Facebook's IPO. Facebook had effectively zero mobile ad revenue when it went public.

Twitter is probably never going to be as big a deal as Facebook, now valued at $108 billion after a year of ups and (mostly) downs — that's just above where it was when it went public.

See also: Facebook Stock Hits New All-Time High

But depending on how smart the company has been about its advertising strategy, and how much more engaged its users are seen to be, its IPO could see far fewer bumps in the road.

What questions do you have about the Twitter IPO? Let us know in the comments.

Image: Leon Neal, AFP