The 7-year-old company posted on its official Twitter account that it has "confidentially submitted an S-1 to the SEC for a planned IPO." A subsequent tweet said simply: "Now, back to work." It's accompanied by a blurry photo people working in the company's San Francisco headquarters.
Under the law, Twitter's financial statements and other sensitive information contained in the IPO filing must become publicly available at least 21 days before company's executives begin traveling around the country to meet with potential investors — a process known as a "road show."
Those presentations will be orchestrated by Twitter CEO Dick Costolo, a former stand-up comedian who will now get an opportunity to take his act to Wall Street.
Twitter's IPO has been long expected. The company has been ramping up its advertising products and working to boost ad revenue in preparation. But it is still tiny compared with Facebook, which saw its hotly anticipated IPO implode last year amid worries about its ability to grow mobile ad revenue.
Since it was founded within another startup and named after the sound of chirping birds in 2006, Twitter has established itself as a cultural touchstone while growing from a few thousand geeky users to more than 200 million today. Its users include heads of state, celebrities, revolutionaries and journalists. Unlike Facebook, which insists that its users go by their real names, Twitter leaves room for parody and anonymity. As such, there are accounts for Jesus Christ and Lord Voldemort, Harry Potter's mortal enemy.
Twitter's main appeal is in its simplicity and its ability to distribute information quickly. Users can send short messages — either public or private — that consist of up to 140 characters. Anyone can "follow" anyone else, but the relationship doesn't have to be reciprocal. This has made the service especially appealing for celebrities and companies that use it to communicate directly with customers.
Most of Twitter's revenue comes from advertising. Research firm eMarketer estimates that Twitter will generate $582.8 million in worldwide ad revenue this year, up from $288.3 million in 2012. By comparison, Facebook had ad revenue of $1.6 billion in the April-June quarter of this year. By 2015, Twitter's annual ad revenue is expected to hit $1.33 billion.
Twitter's moneymaking potential has minted the company with an estimated market value of $10 billion, based on the appraisals of venture capitalists and other early investors who have been helping to fund the business so far. PrivCo analyst Sam Hamadeh said he expects Twitter to aim for a market value of about $15 billion when it prices its IPO.
The public offering comes at a time of heightened investor interest in the IPO market. There have been 131 IPOs that have priced so far this year, according to IPO tracking firm Renaissance Capital. That's a 44 percent increase from the same period the year before. If the momentum continues, 2013 will have the most IPO pricings since 2007 — a year before the financial crisis.
The law that allowed Twitter to file its initial IPO documents confidentially is called the Jumpstart Our Business Startups Act, or JOBS. President Barack Obama signed the law in 2012. It is designed to make it easier for small businesses and startups to grow and create jobs.