Twitter in talks over $9bn stock market flotation
Social networking site follows in Facebook's footsteps with public debut, but top execs fear similar disaster
TWITTER is in the early stages of talks to float on the stock market and could be valued at up to $15bn (£9.6bn).
According to the Sunday Times, management at the social networking company is in the process of selecting several investment banks and in the coming weeks will announce who is to handle the bumper listing. Potential advisers for the high-profile float, expected as early as the first quarter of 2014, include Morgan Stanley, Goldman Sachs and JP Morgan.
Twitter, which currently has 500m users, was founded seven years ago by entrepreneur Jack Dorsey, who still holds a three per cent stake in the San Francisco-based firm.
Last month Ali Rowghani, Twitter's operations chief, and Mike Gupta, the finance director, held a meeting with prospective bankers, where the Twitter executives were said to have voiced a number of concerns about the move. In the wake of Facebook's disastrous public debut, Twitter's top management are worried about the pressure and intense speculation that will surround the company's float. They fear the move will prompt a decline in the company's market value, as happened to Mark Zuckerberg's social network last year.
Although share prices picked up last month, Facebook's 18 May 2012 debut was considered a huge failure: share prices crashed from $38 by more than $20 in under three months and wiped almost $50bn off the company's market value.
At the moment Twitter's value is still a fifth of Facebook's, however, experts estimate that the company will generate $600m from advertising this year, several times more than Facebook is predicted. ·