The Twitter paradox in chart form:
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The newest issue of Men’s Journal contains an amazing story about people desperate to get rich by buying stock in companies exposed to the rapidly-growing legal US marijuana industry. (Hat tip to @modestproposal1 for alerting us to it.)
Written by Erik Hedegaard, the piece focuses on three characters: Read more
This is delirious, but it’s also strangely convincing. Click to gawp:
We are sure this is exactly what the wise legislators of the US had in mind when they passed the Jumpstart Our Business Startups Act last year.
A small internet start-up gets to raise a little bit of capital from private investors without all that cumbersome regulation and public scrutiny so it can invest and hire people. You know, JOBS! Read more
Trouble getting this stuff through compliance…?
Just the one tweet so far from Goldman Sachs on its own shareholder meeting. Read more
Saudi Prince Alwaleed bin Talel has purchased a $300m stake in social media site Twitter, via the Kingdom Holding Company that he owns 95 per cent of, as a strategic investment in a company that is changing the media landscape, the WSJ reports. The shares represent a three per cent holding in the company. Prince Alwaleed is thought to be the Arab world’s richest man, with more than $21bn in wealth. He already owns a 7 per cent stake in News Corp and plans to start a cable news channel, reports Reuters. While investors have been eagerly anticipating a Twitter IPO, the company has stated it’s in no rush, having raised $400m in venture capital financing over the summer.
The value of Twitter has jumped to $8bn, more than double the level accorded to the company as recently as late last year, according to the terms of a fresh $800m investment in the US internet messaging service that has just been completed, the FT says. The investment is the largest venture capital investment in history, according to The Drum, and was led by Russian venture firm DST Global. Like a growing number of investments in fast-growing Internet start-ups, the financing round will be partly used to buy out existing shareholders, said the person, the WSJ reports.
US regulators have begun an investigation into whether Twitter has unfairly disadvantaged other developers who had built businesses by tapping into its global audience, according to a person familiar with the review. The FT reports the Federal Trade Commission has held fact-finding meetings with developers to look at how Twitter manages its relations with companies that have tried to build services and apps around its ecosystem. The study follows a turbulent period in the relations between the internet messaging service and companies that make Twitter applications and “clients”, or software for PCs and smartphones that Twitter’s members use to access the service. The company drew protests from some of its developers a year ago when it first indicated it planned to create more of the applications for its users that had previously been produced by outsiders.
Twitter has seen fresh growth spurt over the past six months even as the company struggles to find a way to make money from its fresh influx of users, reports the FT. A survey by the Pew Research Centre in the US found that Twitter usage by American internet users aged 25 to 44 doubled between November 2010 and May 2011 to 19 per cent.
A JPMorgan fund is in talks to acquire a substantial stake in Twitter, one of the fastest-growing social networking sites, reports the FT. The fund hopes to acquire 10% of the online messaging service for $450m, valuing Twitter at $4.5bn, say people familiar with the plans. It is unclear whether the fund would invest directly or buy out existing investors with Twitter’s approval, they added. JPMorgan set up its Digital Growth Fund this month to give clients exposure to fast-growing private tech companies. It follows a similar move by Goldman Sachs to invest in Facebook. The fund has raised $1.22bn to date, according to a regulatory filing, but plans to raise $1.3bn in total with a maximum 480 investors. JPMorgan expects commission of at least $13m from the fund. On top of the Twitter stake, JPMorgan hopes to invest another third of the fund in another web company – possibly games maker Zynga or telephony group Skype. DealBook notes news of JPMorgan’s interest, first reported by the FT, marks a rapid rise in Twitter’s valuation.
Renren.com plans to list in the US this year in a deal that could make the Chinese company one of the world’s first social networking sites the public can invest in – and therefore a leader in attracting investor funds, reports the FT. The company plans to raise about $500m in an offering managed by Deutsche Bank, among others. Up to now, China’s internet companies have mainly copied the business models of their more mature US peers. But with Facebook’s listing plans still unconfirmed, Renren’s planned listing could make it virtually the only choice for investors wanting to buy into the sector’s growth. The situation is similar with microblogs. While Twitter is not listed, investors can buy shares in Sina, Tencent or Sohu, the Chinese internet portals.
Twitter, the leading online messaging service, has emerged as a particularly desirable, “if still enigmatic” takeover target as internet valuations climb and would-be buyers circle Silicon Valley in an increasingly frothy tech market, reports the WSJ. Talks between Twitter and some potential suitors have produced an estimated valuation of $8bn to $10bn. Executives at both Facebook and Google, among other internet companies, have explored the prospect of acquiring the messaging service, said the Journal citing people familiar with the matter. So far the talks have gone nowhere, but the valuations are striking for a company understood to have earned 2010 revenue of $45m – but lost money as it spent on hiring and data centers – and which estimates revenue this year at $100m to $110m.
Twitter’s latest fundraising has valued the company at $3.7bn, up sharply from the $1bn that the microblogging service was worth a year ago and a potent sign of the stratospheric prices that private investors are prepared to pay for fast-growing internet companies, reports the FT. The deal also adds one of Silicon Valley’s most powerful financiers to Twitter’s growing army of backers, with John Doerr, the Kleiner Perkins partner who was also an early promoter of Amazon and Google, leading the capital-raising round. Twitter would not divulge details of the financing but a person close to the situation said the company had raised $200m at a valuation, before the addition of the extra capital of $3.7bn.
Computer hackers have launched revenge attacks on companies that blocked services to WikiLeaks, the whistle-blowing website, disrupting MasterCard’s online payment processing system for several hours as well as sites controlled by companies that have cut connections with WikiLeaks, reports the FT. The anonymous group of “hacktivists” declared “Operation Payback”, a day after WikiLeaks founder Julian Assange was arrested in London, and urged others via social networking sites Twitter and FaceBook to join them. Separately, the FT reports that hackers also hit Swedish prosecutors — who are pursuing Assange for sex offences — while the NYT reports that Visa and PayPal were also targeted in a move that puts Twitter and Facebook into a “precarious situation”.
James Murdoch has said that News Corp is close to unveiling a news product developed especially for tablet computers, Reuters reports. Murdoch, chief executive of News Corp’s European arm, said that it would be primarily a US product but did not provide further details. News Corp is currently pushing for consumers to pay for online news publications, and has already put its British newspapers the Times of London, the Sunday Times and the News of the World behind paywalls. The news agency also reports that Twitter’s co-founder Evan Williams has said that the company is not facing a capital shortage, and declined to comment on whether the microblogging site was in talks about funding with investment firms.
The new Philippine government of President Benigno “Noynoy” Aquino is enlisting Facebook and Twitter in an ambitious effort to close the country’s gaping budget deficit, the FT reports. Cesar Purisima, the finance secretary, wants citizens to tweet cases of tax evasion and corruption among tax collectors or report them on Facebook. Mr Aquino and his team must tackle a budget deficit that hit a record 3.9 per cent of GDP last year.