The much mooted Twitter IPO is a step closer to realization after the disclosure that Goldman Sachs has been chosen as the lead underwriter ahead of Morgan Stanley. Furthermore the company is likely to be listed on the New York Stock Exchange rather than the Nasdaq after the float of Facebook last year was compromised by a computer delay of 30 minutes.
It is expected that the market value of Twitter could be as high as US$15 billion (A$16 billion). The participating merchant bankers are likely to receive 0.5% of this amount ($80 million), most going to Goldman Sachs.
Twitter is not required at this stage to divulge details of the proposed float, thought to transpire in 2014.
Most of the money raised will go to the present investors, owners, and key employees of Twitter, making them fabulously wealthy.
The present CEO of Twitter is Dick Costolo who took over from Evan Williams in October 2010. Twitter has had a meteoric rise in popularity having only been founded in March 2006 by Jack Dorsey reaching 500 million users in 2012, and handling 1.6 billion searches per day. It is based in San Francisco, and in 2012 had in excess of 900 employes.
Facebook shares have only just recently lifted above the $38 issue price, but the LinkedIn share price has climbed from $35 to currently be trading at around US$250. If advertising revenue continues to grow, the prospects for shareholder capital growth could be very attractive also.
Although September/October are the months noted for greatest market weakness, the recently improved global economic sentiment has led US indices to record highs.
It will be of great interest to see if the Australian market will follow on with catch-up gains, and sustain more IPOs and capital raisings.
- Goldman Sachs beats Morgan Stanley to win prime role in Twitter IPO (dnaindia.com)
- Twitter adds banks to underwriting lineup ahead of IPO: sources (news.yahoo.com)
- Twitter IPO: It’s Official (baltimorenewsjournal.com)
- Twitter IPO Will Be the Most Perfect of All Time (247wallst.com)