Privately-held microblogging platform Twitter. Inc. received a market valuation of about $9 billion after a fund managed by world’s largest asset manager BlackRock Inc. (BLK: Quote) ran a successful tender offer to buy up to $80 million of Twitter stock from its early employees, according to media reports on Sunday.
The private transaction was reportedly overseen by Twitter Chief Operating Officer Ali Rowghani. The valuation was up from the $8.0 billion valuation it got after a similar investment made by a consortium led by DST Global in August 2011.
DST Global is a technology fund managed by Russian billionaire Yuri Milner. It is also an investor in Facebook, Inc. (FB).
New York-based BlackRock is said to have bought the shares at about $17 per share, compared to the 2011 stock sales at $16.09 per share.
The deal enabled early employees of San Francisco-based six-year old social media company to liquidate their stock holdings and options. Twitter will not make any money from the transaction.
The deal gave an opportunity to early employees who were looking to monetize their holdings in Twitter. It also allowed Twitter to consolidate their shareholders by allowing only selected investors to buy shares through the tender offering.
The current offering will also get rid of shareholders that will look to dump their shares after the initial public offering lock-in period, which will affect the company’s market valuation at that time. Twitter could be eying an IPO towards the end of 2013 or early 2014.
The move to help early employees exit their holding stems from the limp stock market debuts, such as those of Facebook, Groupon, Inc. (GRPN), and Zynga Inc. (ZNGA) whose stock price have plunged since their IPOs. Facebook and Groupon have also done deals similar to the one between Twitter and BlackRock in order to delay an IPO.
Since being founded in 2006, Twitter has raised about $1.16 billion, including a $300 million investment from billionaire investor Prince Alwaleed Bin Talal through a secondary offering in late December 201.
Twitter, which allows people to send 140-character messages, or Tweets, to groups of followers, is one of the Internet’s most popular social networking services along with Facebook and Zynga.
BLK closed Friday’s regular trading session at $236.42, up $0.09 or 0.04% on a volume of 1.08 million shares.
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by RTT Staff Writer
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