J.P. Morgan to Buy Twitter Stake

J.P. Morgan Chase & Co. has planned to buy into Twitter, Internet messaging and communications site. The microblogging site operator would be valued at $ 4.5 billion.


According to unidentified sources, Digital Growth Fund would make the purchase. The stake eyed by Morgan would amount to 10%. However, the fund has no intention of buying shares on the secondary market.


Digital Growth Fund was set up to give rich clients exposure to fast-growing private tech firms.


The fund was reported to have raised $ 1.22 billion. The total number of investors reached 480.


Two thirds of the fund are expected to invest in a private Internet company and other six like LivingSocial or online retailer Gilt. Twitter will be the fund’s focus.


JP Morgan has ridden the wave of investor interest in fast-growing held technology firms. In January, Goldman Sachs Group raised $ 1 billion from its foreign clients to invest in Facebook at a $ 50 billion valuation.


Twitter which allows text-based posts of up to 140 characters displayed on the user’s profile page raised $ 200 million in December. The company has valued at $ 8 billion to $ 10 billion by some potential buyers.


The San Francisco-based company has servers and offices in San Antonio and Boston. Since its creation, it has gained popularity all over the world.


The company sent 50 million tweets per day in February 2010. It currently serves about 190 million users, generating 65 million tweets a day, equaling around 750 tweets sent each second. Twitter has moved up to the third-highest-ranking social networking site.


According to Internet market research firm eMarketer, Twitter is likely to generate $ 150m this year.