"A Twitter IPO Announced By Tweet" & "Does a Response of 'Dot-Dot-Dot' Mean 'Yes'?"
Before I dive into Twitter's "tweet-heard-around the world," let me deal with this head-turner that came first. Last week, I was bemused by this Fox Business reporter's take of a Twitter spokeperson's response in an email of "..." (known as an "ellipsis") as somehow confirming an IPO due to the logic that Twitter had previously refused to respond to questions about it. Here are four questions that came to mind:
1. What Does "..." Mean? - Since I use "..." at the end of my blog on a daily basis, you would think I know what it means. As it turns out, my use of it - in the context that I use it - seems to be spot on according to this blog. I asked a friend and he thought it means fill in the blanks with whatever forms the basis of your reality.
2. Is This Today's Equivalent of "No Comment"? - As lauded in footnote 17 of the Basic case: "To be actionable, of course, a statement must also be misleading. Silence, absent a duty to disclose, is not misleading under Rule 10b-5. "No comment" statements are generally the functional equivalent of silence." It may be the death of wit - but companies may want to stick to more traditional responses so as to avoid any perceived (whether justifiable or not) ambiguity or meaning in their responses.
3. Did the Journalist Ask the Proper Question? - As I read the article, the question wasn't "Is Twitter doing an IPO in 2014?" - but rather if anyone at the company can chat about the IPO rumors? Thus, however the response may be interpreted, it wasn't answering the question of whether there will be an IPO.
4. A Brilliant Law School Exam Question? - Definitely...
Don't forget our checklist on deal confidentiality pledges.
Can Companies Announce Confidential S-1 Submissions By Tweet?
Yesterday, Twitter issued this tweet:
We've confidentially submitted an S-1 to the SEC for a planned IPO. This Tweet does not constitute an offer of any securities for sale.— Twitter (@twitter) September 12, 2013
Some members asked if this tweet was permissible. As I blogged last year, a handful of companies relied on Rule 135 to announce a confidential IPO submission soon after the JOBS Act was enacted.
Although Rule 135 notices typically contain more content than the maximum of 140 characters that make up a single tweet, Rule 135 only requires a legend "to the effect that it does not constitute an offer of any securities for sale."
The rest of Rule 135 simply lays out the type of information permitted in a Rule 135 notice - it doesn't require all of that limited information. And I don't find Twitter's tweet to be misleading - it seems to provide all the facts that a Rule 135 notice would need to convey. Professor Davidoff analyzes this too in his DealBook column - and Professor Rodrigues also does so in the Conglomerate Blog. Any different opinions?
Miss the "Being Alan Dye" Spreecast? Catch It Now
The technology held up during yesterday's spreecast with Alan Dye - except I had my microphone jacked up too high (lesson learned for next time). The archive is now available if you care to watch - already over 350 views!
Poll: Does Dot-Dot-Dot Mean "No Comment" to You?
Here is an anonymous poll on the topic of whether you think that a response of dot-dot-dot is the equivalent of no comment:
- Broc Romanek