JP Morgan is considering buying a 10 percent stake in Twitter for $450 million.
According to the Financial Times’ sources, having valued Twitter for $4.5 billion, it is considering some kind of investment in the social networking service. However, it’s unclear which direction JP Morgan will take – whether it’s a direct investment or buying out existing shareholders with a nod from Biz Stone and Co.
Responding to a question from TechEye last year, co-founder of Twitter Biz Stone said that even if it was offered $4 or $5 billion it is still not quite ready for a sale. Stone didn’t rule out investments, and confirmed that it is Twitter’s fiduciary duty to shareholders to consider bids.
JP Morgan established a “Digital Growth Fund” this February, which aims to plug investments into high-growth private tech and online companies. The FT says the fund has raised $1.22 billion already but is aiming for that extra decimal point, targeting $1.3 billion in total, with a maximum of 480 investors.
According to reports, JP Morgan is considering ploughing dosh into other digital companies that are on the up-and-up, with social gaming outfit Zynga on the cards as is voice-call service provider Skype.
While Twitter is nowhere near the value of Zuckerberg’s lot over at Facebook, it has seen phenomenal growth in a comparatively short time since launch. The most recent investment was by venture capital group Kleiner Perkins, which spent $200 million on the social networking service December 2010.