Twitter IPO documents show microblogging's rise

Twitter Inc.'s initial public offering documents suggested 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 Inc., the San Francisco-based Twitter made public its S-1 prospectus Thursday and said it seeks to raise $1 billion. Its proposed ticker symbol is "TWTR."

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.

The fact that Twitter shares will not be available until the company actually goes public did not stop frenzied traders Friday from bidding up the price of a stock with the ticker symbol "TWTRQ" - belonging to the bankrupt electronics retailer Tweeter Home Entertainment Group. Tweeter shares rocketed from one cent to 15 cents before ending at 5 cents as market officials declared an "extraordinary event" and stopped the fevered trading at midday.

With Twitter taking the wraps off its plan, the company will soon embark on a road show to promote the deal. The IPO will be a test for investors burned in recent years by the offerings of Internet companies such as Facebook, Groupon Inc., and Zynga Inc., all of which plunged after their offerings. While Facebook shares have climbed back, Groupon and Zynga are trading below their IPO prices.

The Twitter offering will be pivotal for chief executive officer Dick Costolo, who in 2010 became Twitter's third CEO in as many years. He is credited with bringing management discipline, rapid hiring, and a business plan to a company that was bogged down by a lack of focus and frequent technical outages.

Twitter also disclosed that a majority of its revenue derives from mobile advertising, an area where rivals have struggled. 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.

Twitter posted a net loss of $69.3 million in the first six months of 2013, compared with a net loss of $49.1 million in the same period a year ago. The company said that as of June 30, it had incurred an accumulated deficit of $418.6 million.