Banks set for a fee bonanza as Twitter goes public

Goldman Sachs likely to be the big winner from social media’s hotly anticipated IPO 

New York

Twitter’s arrival on Wall Street is expected to generate tens of millions of dollars in fees for banks, with Goldman Sachs on track to reap the biggest gains after securing the mandate to be the lead underwriter for the hotly anticipated initial public offering (IPO).

The investment bank is understood to have beaten its Wall Street rival, Morgan Stanley, for the position. The latter was the lead underwriter for Facebook’s stock-market debut, the last major tech IPO.

But problems with the social-media giant’s listing – investors balked at the offer price, triggering declines in the stock after the debut – appear to have given Goldman an edge with Twitter.

The Facebook listing also landed Morgan Stanley with a $5m (£3m) fine from the securities regulator in the US state of Massachusetts.

The regulator, William Galvin, claimed a Morgan Stanley banker had coached Facebook on how to disclose information to Wall Street analysts, potentially putting ordinary investors at a disadvantage.

Bagging the top advisory role for the Twitter listing is a coup for Goldman. With its platform continuing to grow in popularity, the company has long been suspected of plotting a move to go public, and its debut promises to be one of the most high profile in  recent times.

Launched in 2006 by Jack Dorsey, Biz Stone and Evan Williams, Twitter now attracts more than 200 millions users every month, with large corporations, celebrities, governments and private individuals around the world using the platform to publish 140-character messages in real-time.

Appropriately, the listing plans came to light with a tweet published on the company’s official account on Thursday evening: “We’ve confidentially submitted an S-1 to the SEC for a planned IPO. This tweet does not constitute an offer of any securities for sale.”

Put another way, Twitter announced that it had it had filed the initial paperwork for a listing with the Securities & Exchange Commission, the US market regulator, using a new rule which allows companies with less than  $1bn in revenues to submit the  documents confidentially.

The rule allows such companies to keep details of their finances private until the moment they begin  courting investors.

The tweet announcing the IPO filing was followed by one that simply said: “Now, back to work”. It came attached with a picture showing Twitter employees at a bank of desks.

Estimates floating around Wall Street suggest that the service could be worth anywhere from $10bn to $20bn when it makes its market debut, which is expected next year.

This year, the company is expected to be on track to more than double its annual revenues to around $500m. The estimate, from the private company research firm PrivCo, is at the modest end of the scale. eMarketer expects Twitter to earn around $580m in revenues in 2013. Next year, it expects the service to pocket around $1bn in ad revenues.

Goldman Sachs declined to comment. Morgan Stanley did not respond to a request for comment.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003