#TWITTERIPO  | Twitter, the microblogging service that has grown into one of the world’s largest platforms for public conversation, is about to take a big step into maturity by selling stock to the public. The company announced on Thursday â€" in a tweet, naturally â€" that it had filed paperwork with regulators to eventually sell shares in an initial public offering, Vindu Goel, Nick Bilton and David Gelles report in DealBook.
But investors, for now, are not able to take a look at Twitter’s financials. The company filed its first documents months ago under a special provision of securities law that allows a company with less than $1 billion in annual revenue to keep its financial data secret until it actively begins marketing its stock. For that, Twitter can thank the Jumpstart Our Business Startups, or JOBS, Act, which became law in 2012.
“Among the concerns that opponents of the law had was exactly the kind of situation that is now going on with Twitter: a prominent company, known around the world, has filed for what will most likely be the most anticipated stock offering since Facebook â€" and we know precious little about its business,†Steven M. Davidoff writes in the Deal Professor column.
Twitter’s caution follows the disastrous debut of its archrival, Facebook, whose stock plunged after the I.P.O. in May 2012. But investors recently have become enamored of all things social and mobile. Facebook’s shares hit a record high this week and ended Thursday at $44.75, well above the $38 I.P.O. price; LinkedIn, the business-oriented social network, is trading at nosebleed levels.
“By its own estimates, Twitter was profitable in December of last year and generated more than $100 million in revenue in the final quarter of 2012, according to numbers in an e-mail shared among staff. These numbers could not be independently verified,†DealBook reports. “But it has not been consistently profitable in 2013 because it has reinvested money in acquisitions, said people with knowledge of Twitter’s financial data who declined to be named.â€
“While the company hopes to go public by the end of the year, the actual public offering could take place in early 2014, according to people who were briefed on the matter. Goldman Sachs is leading the underwriting for the offering, according to people briefed on the matter. It was not yet clear which other banks would participate, but JPMorgan Chase and Morgan Stanley are likely to be involved, according to several people knowledgeable about the deal.â€
In a seeming confirmation of Twitter’s dominance, news of the planned I.P.O. lit up the messaging service. The wisecracks were flying. “It’s very important that everyone keep tweeting great content during this important valuation period,†one Twitter account, @pourmecoffee, wrote. Some Twitter users speculated about what the ticker symbol might be. One early investor in Twitter, George Zachary, wrote: “Surreal: I’m using Twitter reading about I.P.O. filing remembering early days as an original investor.â€
2 CONSULTANTS TO BANKING INDUSTRY UNDER SCRUTINY  | Regulatory scrutiny of consultants to the banking industry â€" known as Wall Street’s shadow regulators â€" is intensifying. New York State has subpoenaed two consulting firms as part of a broader investigation into the industry’s perceived coziness with the financial industry, according to people briefed on the inquiry, Ben Protess and Jessica Silver-Greenberg report in DealBook. The two firms that received the subpoenas in recent months â€" Promontory Financial Group and PricewaterhouseCoopers â€" are among the industry’s biggest names.
ON THE AGENDA Â |Â Henry M. Paulson Jr., the former Treasury secretary, is on CNBC at 7 a.m. Richard Kovacevich, the former chief of Wells Fargo, is on CNBC at 8 a.m. Data on retail sales in August is out at 8:30 a.m. The Reuters/University of Michigan consumer sentiment index for September is out at 9:55 a.m. John Lilly, a partner at Greylock Partners, is on Bloomberg TV at 6 p.m.
REGULATORS ASK MARKETS TO IMPROVE TECHNOLOGY  | The Securities and Exchange Commission is asking the nation’s stock exchanges to introduce “kill switches†and other technological updates after a spate of computer problems have disrupted stock trading, Nathaniel Popper reports in DealBook. The head of the agency, Mary Jo White, asked for the changes at a meeting on Thursday with the top executives of the nation’s exchanges, which will be expected to propose specific technology upgrades and new rules in the next 60 days, according to people at the meeting.
Long Battle for Dell Ends in Victory for Founder  | Dell shareholders voted to approve the computer company’s $24.9 billion sale to its founder, ending a months-long slog that included fierce opposition from some investors.
DEALBOOK
Lessons From the Dell Deal  | The tortuous Dell buyout is essentially over. Now, it’s time to step back, be introspective and draw some lessons, Steven M. Davidoff writes in the Deal Professor column.
DealBook »
Vodafone Says Shareholders Clear Kabel Deutschland Bid  | Vodafone says it has received sufficient investor support to win approval of its 7.7 billion euros ($10.2 billion) takeover of the German cable operator Kabel Deutschland.
DealBook »
KPN and América Móvil Still in Talks  | América Móvil, the Latin American telecommunications company, confirmed that it remained in talks with the Dutch cellphone company about a potential bid worth $9.6 billion.
DealBook »
A $4 Billion Hospital Deal in Germany  | Rhoen-Klinikum of Germany is selling most of its hospitals to a rival, Fresenius, for 3.07 billion euros ($4.1 billion), Reuters reports.
REUTERS
Tradeweb Agrees to Buy BondDesk  | Tradeweb Markets, a fixed-income trading platform, is buying the BondDesk Group, which provides retail wealth management and trading technology, Reuters reports. Terms were not disclosed.
REUTERS
Accountants Acting as Bankers  | A regulatory tribunal in Britain declared this week that accountants have an obligation to always work in the public interest, Floyd Norris writes in the High & Low Finance column in The New York Times.
NEW YORK TIMES
Ackermann to Resign From Board of Siemens  | Josef Ackermann, the former chief executive of Deutsche Bank, plans to resign as a deputy chairman of Siemens, a decision that comes soon after he abruptly resigned as chairman of Zurich Insurance Group last month.
DealBook »
2 Big Firms Take a Chunk of Verizon’s Bond Deal  | Pimco and BlackRock together bought about $13 billion of Verizon’s $49 billion bond offering, The Wall Street Journal reports, citing unidentified people familiar with the matter.
WALL STREET JOURNAL
A Working-Hours Complaint at Goldman in Zurich  | Goldman Sachs’s offices in Zurich were “visited on Wednesday by members of the local labor inspectorate following a complaint two weeks ago by the personnel union for Swiss banks connected to Goldman’s timekeeping practices,†The Financial Times reports.
FINANCIAL TIMES
Wells Fargo Said to Be Selling Mortgage Servicing Rights on $41 Billion in Loans  |Â
BLOOMBERG NEWS
California Coffee Chain Does a Deal With Private Equity  | A group of investors led by Advent International teamed up with firms from Taiwan and South Korea to acquire a “significant equity position†in the owner of the Coffee Bean and Tea Leaf, a chain based in California.
WALL STREET JOURNAL
Foreign Funds to Be Allowed to Raise Money in China  | The Financial Times reports: “Six global hedge funds are set to secure the first-ever approval to raise money from institutions within China for investing overseas, a key reform in the opening of the country’s closely guarded capital account.â€
FINANCIAL TIMES
In Hilton I.P.O., a Losing Deal Turns Around  | Hilton Worldwide Holdings, the hotel company owned by the Blackstone Group, is seeking to raise at least $1.25 billion in what will be one of the most closely watched initial public offerings of the year.
DealBook »
Hilton Is Ready to Go Public, but Other Buyouts Are Still Waiting  | Some of the biggest of companies of the buyout era, including First Data and Clear Channel Communications, remain in the hands of their private equity buyers, which are reshaping the companies with varying degrees of success.
DealBook »
Federal Judge Approves American Airlines’ Plan to Exit Bankruptcy  | Judge Sean H. Lane approved the carrier’s plan nearly two years after its bankruptcy filing, contingent on Justice Department approval of its merger with US Airways.
DealBook »
JPMorgan Said to Be Spending More on Oversight  | JPMorgan Chase “plans to spend an additional $4 billion and commit 5,000 extra employees this year to clean up its risk and compliance problems, according to people close to the bank,†The Wall Street Journal reports.
WALL STREET JOURNAL
A Reported Plunge in Jobless Claims â€" Or Not  | After initially reporting on Thursday that initial jobless claims fell to their lowest level last week since the spring of 2006, the government then said the number was unreliable, skewed by upgrades on two state computer systems.
NEW YORK TIMES
Fed Prepares for Changes in Policy and Policy Makers  | Federal Reserve officials face a challenge in “convincing markets that the Fed remains committed to its broader effort to stimulate the economy even as it begins to pull back from the most visible component of that campaign â€" and even though as many as nine of the 12 voting members of the Fed’s policy-making committee may be replaced in the next year,†The New York Times writes.
NEW YORK TIMES
