Twitter Is Losing Money

Twitter chairman Jack Dorsey

Twitter chairman Jack Dorsey

Photo by Bill Pugliano/Getty Images

Twitter, the hottest company to hit the tech world since Facebook, is losing money.

In its long-anticipating public IPO filing, the seven-year-old San Francisco-based startup revealed that its revenue has been growing fast, but not as fast as its expenses. The company earned $253 million in the first half of this year, more than double what it took in over the same period in 2012. But its net losses grew, to $69.3 million.

That doesn’t sound like great news for a company that is hoping to raise $1 billion from investors in its initial public offering. But people will buy the stock anyway, on the theory that the company’s rapid growth will eventually translate to profits.

Twitter today has more than 200 million active users, who fire off some 500 million tweets a day. By comparison, Facebook has more than 1 billion active users. Whether Twitter can close that gap is one of the biggest questions looming over its IPO.

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