Twitter doesn’t make any money. Neither do two-thirds of technology companies that have gone public this year in the United States. But the stock market’s optimism is boundless: Tech IPOs are posting first-month returns not seen since the late-’90s dotcom bubble. And social media stocks that investors once viewed skeptically are now trading near record highs. It’s a good time to be Twitter, which filed its IPO prospectus last week and intends to start trading as a public company next month.
The offering, which will likely seek to raise more than $1 billion, comes nearly eight years after a late-night brainstorm between two wallflowers who had drunk too much vodka and Red Bull. Twitter’s backstory was fleshed out considerably this week in an excerpt from Nick Bilton’s (fortuitously timed) book about the startup.
Bilton’s book is certainly a more exciting read than Twitter’s 120,000-word IPO filing, but it may also be more informative for investors. After all, Twitter chose to omit financial data from 2008 and 2009, when it was going through serious growing pains but finally starting to earn revenue. What Twitter did reveal in its filing turns out, upon closer inspection, to be largely superficial details. That will make it hard to assess how much room Twitter’s advertising business—85% of its revenue—has to grow.
What we did learn from the prospectus is that Twitter’s ad rates are falling, its growth in the US is slowing, and it earns less money when people use Twitter on their phones, which more and more are doing. But given the market’s relentless optimism for tech stocks, such warnings don’t look like they will dent the prospects for Twitter’s IPO.—Zachary M. Seward
Five things on Quartz we especially liked
How Aflac built its empire on Japan’s fear of cancer. The insurance firm known in the US for its quacking duck ads actually makes most of its profits in Japan, writes Matt Phillips, in a long and fascinating exploration of how cancer became one of Japan’s biggest killers and biggest horrors.
What keeps Beijing’s property bubble aloft? Mistresses. If it weren’t for the estimated 200,000 women from rural China kept as lovers by wealthy businessmen and corrupt officials, apartments in the Chinese capital might become noticeably more affordable, writes Heather Timmons.
The world needs a rocket tax. The new movie “Gravity” is about two astronauts threatened by a cloud of orbital debris from broken-up satellites. In reality, space debris is becoming so bad, explains Adam Pasick, that a group of economists have proposed a tax on rocket launches to prevent a “tragedy of the commons” affecting space.
Janet Yellen will be the most powerful woman in US history. Matt Phillips makes the argument that the new Fed chair nominated this week will outclass Madeleine Albright, Hillary Clinton, Condoleezza Rice, Ruth Bader Ginsburg and Eleanor Roosevelt in her influence over both the US and the world.
You’re not bad at math—you just didn’t try. Americans tend to think that people born without math skills shouldn’t do math. Chinese people tend to believe they just need to study harder. Allison Schrager, who “never considered [her]self great at math” but got an economics PhD all the same, takes the Chinese view, and argues that Americans need to change their attitude if the country isn’t to fall even further behind.
Five things elsewhere that made us smarter
Could American Football be the next Big Tobacco? A two-hour documentary on ”Frontline,” the investigative news show on American public television, showed just how far the National Football League has buried its head in the sand over brain injuries suffered by football players. As journalist John Harwood said, it makes the NFL look like the cigarette industry.
How to understand the game being played in Washington. Justin Fox in the Harvard Business Review takes a game-theoretic approach to analyzing the strategies of Democrats and Republicans in the debt-ceiling battle, and explains why brinkmanship benefits both sides—but why there’s also reason for hope.
We may never understand consciousness. Michael Hanlon in Aeon explains why, despite the breakneck advances in science and computing power that may one day allow us to simulate conscious processes, we are so far from understanding what makes consciousness happen that it promises to remain a long-lived mystery.
Inside the mind of Antonin Scalia. The US supreme court’s longest-serving justice sat down for a long interview with Jennifer Senior for New York magazine, in which he comes across as less the razor-minded scholar than a jolly but curmudgeonly grandfather. And, points out the New York Times’ David Carr, Scalia, like everyone else, seems to read a remarkably narrow range of media.
Jeff Bezos’ management style. “Are you lazy or just incompetent?” “I’m sorry, did I take my stupid pills today?” “Why are you wasting my life?” Just three of the Bezos quotes from an excerpt of Brad Stone’s new book The Everything Store: Jeff Bezos and the Age of Amazon.
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