Twitter seeks new credit line worth millions ahead of IPO
Social network takes advantage of favourable conditions with plans for huge credit loan
Twitter is seeking a pre-IPO credit facility that could run into hundreds of millions of dollars, giving the social network giant extra flexibility ahead of its initial public offering.
The Financial Times reports that Twitter is in talks about a revolving credit facility with a group of banks, including JPMorgan Chase and Morgan Stanley.
Earlier this month Twitter announced that it had filed the necessary paperwork with US regulators for its planned stock market flotation. Although it has not revealed the timeframe for its listing, analysts expect Twitter to make its public debut before the end of the year.
The huge deal would allow Twitter to take advantage of its current favourable borrowing conditions. Banks are eager to win a position within an IPO, giving the social network better leverage to request a credit line. The move follows in the footsteps of Facebook, which received a financing package worth $8bn two months before it went public.
Although spokespeople for the social network have so far declined to comment, sources have speculated that the loan could exceed $500m and could even approach $1bn.
The funds would give Twitter extra working capital in the coming months to expand and make bolt-on acquisitions. To strengthen its advertising tools, the company has already acquired MoPub, a mobile advertising network, and Trendrr, a tool for marketers that tracks online chatter during television shows.
The move would also allow Twitter increased flexibility to make deals or finance international expansion in the months immediately after its stock market launch. ·