Twitter staying private

Twitter CEO Dick Costolo told the audience at Wired’s Disruptive by Design conference on May 1st that Twitter will not be going public any time soon, and that a ‘pro’ version may be available to individual users eventually.

On the idea of Costolo missing out on an “IPO window” and the inevitability of going public, Costolo had this to say:

The business is working so well and we financed the growth of the company the way we wanted to finance it last year that we don’t see the need to think about that stuff right now.

There’s no window, that’s silly short-sighted thinking. Google went public on its own terms. If you have a great business, then you can be a public company whenever you want to be a public company. You’re not beholden to a window.

Despite Facebook’s recent IPO announcements, I think staying private is probably the smartest move for Twitter.  When the public has access to most of your financials and has significant voting power (unless you structure your stocks like Zuckerberg, and maintain majority voting control), things tend to get messy.  Eventually, assuming Twitter continues to grow, they will hit a ceiling where private equity can no longer support their growth, and they’ll be left with a tough decision: stabilize growth intentionally, or publicly finance and deal with all the hassle that comes with being a public company.  My suggestion? Stay private.  Too many tech companies have crashed recently, and I would hate to see another one fall into the depths of public financing and government oversight.


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