THE TWITTER IPO: CROSS-SELLING!

Facebook CEO Mark Zuckerberg recently joked at a conference that he would be the last person to advise Twitter executives on "now to make a smooth IPO". Before Facebook's IPO, executives increased the size of its offering and the price, despite some internal concerns about the strength of its ads business. While the offering was also haunted by technical challenges on the Nasdaq market, some critics blamed the stock's challenges on greed among Facebook's management.

Twitter chose Goldman Sachs as the lead underwriter for its offering, over the Morgan Stanley team that advised Facebook, according to people familiar withe the decisions. Twitter is in the process of discussing which additional banks will be involved in the process. A number of other banks are already in the mix, including Morgan Stanley, Bank of America's Merrill Lynch and JPMorgan, who had leading roles on LinkedIn's IPO in 2011.

The discussions with the banks also include possible extension of credit to Twitter, people familiar with the talks said. Twitter would use the loans for general working capital and to pay taxes related to employees' stock options. In this respect, Twitter's IPO process appears tto mirror that of Facebook, which secured similar credit lines ahead of its own IPO last year.

By all external indications, Twitter's ad revenue continues to grow, particularly on mobile devices. Twitter's revenue is sealed inside its confidential filing, but analisyst firm eMarketer expects its ad revenue growth to a little under $1 billion next year, up form $583 million this year. It also purchased MoPub last week for $350 million, a mobile advertising firm.

NOTE:  investment (and commercial) banking "products" involved. Cross-selling, anyone?

[From the Wall Street Journal, September 2013].
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