“Twitter files a Cautious IPO” is a better description than “Confidential IPO”

Capital markets media was all a-tweet last week regarding Twitter’s proclamation of their intention to file their S-1 as a confidential IPO under the JOBS (Jumpstart Our Business Startups) Act. According to an Ernst & Young study, 59% of eligible companies chose to keep their IPO filings confidential.


The JOBS Act allows firms with less than $1 billion in annual revenue (labeled emerging-growth companies) to keep their IPO filings confidential up until just three weeks before they roadshow and market their shares. This is in contrast to the typical S-1 file which is openly filed months before the roadshow giving potential investors, media, peers and competitors a longer time window to consider an investment.

Besides being less expensive for companies to go public, the JOBS Act created the confidential IPO process to allow companies to test the waters for their IPO by getting input and criticism from the SEC and certain investors; it also makes it easier for a company to gently back down from an IPO if the reaction isn’t what was expected.

The term “confidential” is bad marketing by the SEC. The company is being cautious about their IPO. Testing the waters. With the obvious frenzy around Twitter and social media IPO comparisons, it’s a pretty smart choice… especially when you consider Twitter transparently informed us (in a Tweet!) that they are executing their S-1 registration.

PR Newswire – Vintage Filings works with companies for the drafting and filing of their confidential S-1 file. The interaction with their advisors and the SEC is exactly like a “normal” IPO. Please download our IPO workflow whitepaper here to see a graphic depiction of the process. Think “ping-pong.”

All the media pundits that are writing that there is something “secret or sneaky” going on with Twitter and their confidential IPO are misguided. If a company wants to be confidential in the negative sense (aka: secret sneaky), they can simply buy a shell on Craigslist and/or reverse merger.

Have a great day.

5 responses to ““Twitter files a Cautious IPO” is a better description than “Confidential IPO”

  1. Right. Haters gonna hate.

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