JP Morgan angling for 10% Twitter stake
US Investment Bank JP Morgan is set to put its financial might behind Twitter’s traffic heft with a purported $450m bid to take a 10% stake in the social media firm.
The possible purchase would be the first of the bank’s Digital Growth Fund which has so far raised $1.22bn to invest in new media. Other possible targets for the fund – games maker Zynga and internet phone call firm Skype.
If the Twitter deal goes ahead, it would value the site at $4.5bn, a 27.5% mark up on its valuation just three months ago. In September 2009, Twitter was valued at a mere $1 billion. The new figures are still way short of Facebook: currently valued at around $52 billion, although the Wall Street Journal says recent share trades suggest a value of nearly $84 billion.
Twitter, founded in 2006, has witnessed exponential growth recently and now counts 253m unique visitors a month, a stellar 85% higher than this point last year. It is credited with making possible the revolution in Egypt. On Sunday night, the service played host to thousands of users, commenting on the Oscars in real time.
The big question: Can it create a lasting profitable business from its millions of fans?
Twitter introduced its first ads in April. Brands like Coca-Cola and Nike bought into special messages called “promoted tweets.” Twitter, which now has 300 employees, could reach $150 million in ad revenue this year, according to one estimate.Interested investors will need deep pockets if they want to cash in on the feeding frenzy however, the minimum stake being accepted is $250,000.