JP Morgan Looking for Buy-In with Twitter

A JP Morgan Chase investment fund, known as JP Morgan Digital Growth Fund, is reputed to be seeking a minority stake in the social media industry by buying a portion of the micro-blogging site Twitter. The website is currently valued at nearly $4.5 billion, and employs nearly 350 employees. Its current valuation has nearly quadrupled in the past year. The talks are ongoing and a deal still may not emerge according to reports from the New York Times. Both Chairmen for Twitter and JP Morgan have declined commenting on this issue.

The investment fund from JP Morgan is expected to encompass investments beyond this initial investment in twitter. The market for this sector has been rapidly expanding since its utility was recognized with uprisings across the world providing instant updates from individuals with front row seats to the conflict. It provides a source of information otherwise unavailable to reporters.

Other companies ranging from online gaming companies such as Zynga or coupon providers such as LivingSocial have also seen a substantial increase in growth and profit over the past few years. It has been reported by the Wall Street Journal that JP Morgan could also be interested in buying a stake in the online gaming firm Zynga Inc.

The move is reminiscent of the Goldman Sachs digital investment fund, which raised nearly $1 billion from investors in order to buy into Facebook. However, indications are pointing in a greater size and scope of the digital investments from JP Morgan Chase. Already, the company has raised $1.22 billion from investors outside the United States, projecting a total value of $13 million in commissions. Minimum investments are set at $250,000. Surprisingly, according to the Wall Street Journal, it was originally anticipated that JP Morgan would raise between $500 million and $750 million for this venture capital endeavor.

Sources:

http://dealbook.nytimes.com/2011/02/27/jpmorgan-fund-seeks-minority-stake-in-twitter/?partner=rss&emc=rss

http://www.theglobeandmail.com/report-on-business/jpmorgan-fund-in-talks-to-buy-twitter-stake/article1922840/

http://online.wsj.com/article/SB10001424052748704288304576171033398632972.html?mod=googlenews_wsj