Twitter’s IPO Filing Highlights Another Bad Provision in the JOBS Act
Twitter announced this afternoon that it has filed a registration statement with the SEC to go public. Under a provision of the Jumpstart Our Business Startups (JOBS) Act, Twitter doesn’t have to disclose its filing to the public because it has less than a $1 billion in revenue. Based on various private transactions in Twitter shares, it’s clear that the company will have a multibillion valuation. Since Twitter is going to be a large deal, the public and institutional investors should every opportunity to evaluate the deal before shares are sold to the public. Moreover, there’s no reason why Twitter and their investment banker Goldman Sachs couldn’t comply with the old law. Twitter’s confidential filing is merely further proof that the JOBS Act was an ill-conceived piece of legislation. See, “We Need Acronym Reform: The Jobs Act (March 4, 2013)” for my critique of the JOBS Act.
As you’d expect Twitter made this announcement via a tweet. Why didn’t they release the entire registration via a series of tweets? If its initial filing is about as long as Facebook’s S-1, something in the neighborhood of 4,500 tweets would have done the job of providing the public was proper disclosure.