Twitter’s decision to list on the New York Stock Exchange is a victory for the Big Board that opens the door for more Internet listings.
Twitter, which announced the decision Tuesday in a regulatory filing, joins Pandora Media, LinkedIn and Yelp as Internet companies that chose the NYSE since 2011. While Nasdaq OMX Group Inc. scored a coup by landing the Facebook Inc. initial public offering in 2012, its reputation was tarnished by a software malfunction that delayed trading for the social network. Competition for IPOs is critical for both exchanges, which get about a fifth of revenue from listing fees.
“Companies like to list where other, similar companies are listed,” Richard Kline, a Menlo Park, Calif.-based partner at the Goodwin Procter law firm who focuses on technology company funding, said in a phone interview. “Anybody associated with the offering will get an uplift from it, and next time they meet with a company’s board they can say ‘we won Twitter.’”
Twitter also said in the filing that its revenue more than doubled to $168.6 million in the third quarter. Twitter will probably start a roadshow with bankers to promote the deal in the last week of October, said people with knowledge of the matter, who asked not to be identified because the details aren’t public.
“This is a decisive win for the NYSE,” the exchange operator said in a statement over e-mail. “We are grateful for Twitter’s confidence in our platform and look forward to partnering with them.”
Choosing NYSE rather than Nasdaq highlights the different paths that Twitter, a microblogging website whose users communicate in 140-character posts known as tweets, and Facebook have taken to go public. Facebook chose Morgan Stanley for its listing, while Twitter picked Goldman Sachs as the lead underwriter and kept a low profile during the process.
The Twitter offering, which seeks to raise more than $1 billion according to the people familiar with the matter, will probably be one of the year’s largest. Twitter is fairly valued at about $12.8 billion, based on the value of its common stock at $20.62 a share as of August, according to a regulatory filing. There are 620 million shares outstanding, people with knowledge of the matter have said.
“All of us at Nasdaq wish Twitter well as they pursue their initial public offering,” Nasdaq OMX spokesman Rob Madden said.