(Photo credit: Leon Neal/AFP/Getty Images)
By Matt Krantz and Alistair Barr, USA TODAY
The hotly anticipated IPO from social networking company Twitter is planning to list its shares on the New York Stock Exchange.
The move breaks a long-standing tradition of high-profile tech companies to list on the Nasdaq. For decades, the Nasdaq has been home to technology stock giants.
"This is a blow to the Nasdaq," says John Fitzgibbon of IPOscoop.com.
Twitter, which is planning to raise at least $1 billion in the IPO, updated its regulatory filing Tuesday to include more-recent results and new data on user growth.
The company will go on a roadshow to meet with potential investors from Oct. 28 to Nov. 6. The stock is expected to price Nov. 14 and begin trading on Nov. 15, CNBC reported Tuesday.
Following a number of glitches and problems, though, the Nasdaq's reputation with tech investors has dimmed. The initial public offering of Facebook last year was marred with technology issues and delays that resulted in confusion and legal action. And earlier in this year, the Nasdaq was frozen for hours, in a so-called "Flash Freeze" due to a technology problem with its quote service.
While losing Twitter to the NYSE is just the latest high-profile loss for the Nasdaq, the erosion had already started this year. Of the 21 technology IPOs to begin trading this year through late August, 13 have listed their shares on the NYSE, says Richard Peterson of S&P Capital IQ. That's well above the eight that listed on the Nasdaq.
And earlier in the year, tech giant and long-time Nasdaq member, Oracle, moved its listing over to the NYSE. As stock markets move to an all-electronic model, Nasdaq's claim to having a digital edge continues to erode. And now TWTR, Twitter's proposed ticker, will be the latest trophy for the NYSE.
"The ghost of Facebook was in the background," Fitzgibbon says. "The NYSE has lowered its requirements and hasn't had a train wreck."
Meanwhile, the money-losing Twitter revealed additional financial details about its fledgling business. Twitter reported revenue of $422 million in the first nine months of 2013, up from $205 million in the same period of 2012. The net loss was $134 million, up from $71 million. Twitter said it had 232 million monthly active users during the third quarter, up from 218 monthly actives in the previous quarter.
Given the level of negative attention and fines Nasdaq received following its problems with the Facebook IPO, both Nasdaq and the NYSE have certainly inspected their systems and were prepared for Twitter, says Jay Ritter, professor of finance at the University of Florida.
Still, there's no guarantee the Twitter IPO will launch without a hitch, even though the stock is listed on the NYSE, Ritter says. The Twitter IPO, though, is likely to be a tenth of the size of the massive Facebook offering, making problems all that less likely, Ritter says.
While the exchanges aggressively battle over listings, it's largely a behind-the-scenes skirmish that doesn't matter much to investors anymore, Ritter says. "Ten years ago, it would have made a difference," he says. "But now, from an investor's point of view, it does not."