Twitter Inc. was valued at about $9 billion after early employees sold $80 million in shares to a fund managed by BlackRock Inc. This fact was revealed by Bloomberg after three people with knowledge of the matter said.
The sales, according to the media, were overseen by Twitter Chief Operating Officer Ali Rowghani and the transactions were private.
Twitter apparently is helping early shareholders realize part of the value of their holdings. Meanwhile, it offers opportunities to a select number of investors to obtain equity in the fast-growing Internet company before it holds an initial public offering. Facebook did something similar in the past few years.
Twitter’s early shareholders sold their holdings to BlackRock, the largest money manager. In 2011, the blog-site’s value was estimated by DST Global at around $8 billion, people with knowledge told media.
Twitter’s Chief Operating Officer, who was promoted from the role of finance chief last month, has taken an active role in lining up buyers for shares, the media says. In doing so, he may seek to limit pressure on Twitter’s valuation that could result from employees dumping a large amount of stock after post-IPO “lockups” on their shares are lifted.
The close involvement of Twitter in private-share sales is a shift from the freewheeling marketplace for shares of Facebook Inc. that arose before the social network’s 2012 public offering. A way back in time, on a number of websites, Facebook shares were traded freely among employees and investors.
Twitter have turned away many potential buyers so far and limited access to the company’s financials to a select few investors.
The company has sought to limit private-share sales in the past. In 2011, Twitter asked shareholders to refrain from selling their shares on Web exchanges, according to insiders.
Twitter hasn’t disclosed plans for a public-market debut yet.
BlackRock’s purchase and Twitter’s valuation were previously reported by the Financial Times.