How the federal shutdown impacts Twitter's IPO

Companies may still be able to file documents with the SEC, but the agency will not approve or deny them for the time being.

By 247 Wall St. Sep 30, 2013 12:48PM

File photo of smartphone displaying Twitter logo (© Soeren Stache/dpa/Corbis)Some market watchers expected Twitter to file papers related to its initial public offering with regulators this week. The likelihood of that has died, however, as the federal government prepares to shut down.


Companies may still be able to file documents with the SEC, but the agency will not approve or deny them for the time being. Twitter's management and bankers are too smart to file when the government is in chaos. The focus on the IPO application and what it means to Wall Street will be undermined.

 

Imagine if Facebook (FB) had elected to file its IPO documents with the SEC during a lull, when the agency's doors were barely open. They may not have been posted at the SEC's website at all. The clerks and other minions who do this kind of work will be at home, hoping that the government will be reopened with legislation that gives them back pay.

 

Twitter management and bankers are unlikely to be concerned with the delay. Based on almost any information regarding the cash on Twitter's balance sheet, it will be months before it needs money for operations. A huge expansion of its business or any mergers or acquisitions will have to be put off. However, this is not likely to affect the social network's long-term future.

 

Twitter will not file its IPO documents with the SEC this week, and not until the SEC has been open long enough to get its house back in order. There is no reason for Twitter to start the process in the middle of a catastrophe.

 

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