It’s been a good couple of months for Twitter (NYSE:TWTR), considering the company’s shares have gained 74 percent since its initial public offering on November 6, but newly released Securities and Exchange Commission filings show that the now hotly traded social network was first put in the hot seat by the SEC before orchestrating its IPO.
According to Bloomberg, in the weeks leading up to Twitter’s IPO in November, the agency questioned the company’s executives on how they planned on Twitter meeting expectations of fast growth, especially when reports have highlighted the network’s slowing user growth and continued unprofitability. Twitter’s revenue has more than doubled over the past year, but its loss expanded to $64.6 million in the September quarter, more than double that of a year earlier, and the company still isn’t expected to realize a profit until at least 2015.
The filings reveal that Twitter addressed the SEC’s concerns this fall by explaining that its revenue will hinge more on current users’ increased activity rather than an influx of new users signing up for accounts. The San Francisco-based company said it expects the addition of new accounts to slow but that it feels confident in its ability to increase its current users’ activity and make them more appealing to ad buyers.