Twitter Said to Pay 3.25% Bankers' Fee for Market Debut
Twitter Inc. is seeking to raise more than $1 billion in an initial public offering and plans to pay bankers a fee of about 3.25 percent, people with knowledge of the matter said.
The social-media service will probably start a roadshow with bankers to promote the deal in the last week of October, said the people, who asked not to be identified because the details aren't public. Twitter, which is leaning toward listing on the New York Stock Exchange, is still negotiating with that exchange and Nasdaq on the ability to handle the IPO, as well as the fees associated with the listing, one of the people said.
Twitter's fees are higher than those paid by Facebook Inc. (FB) when it went public. That's because Twitter's is a smaller offering, said two people with knowledge of the negotiations. Facebook paid banks 1.1 percent at its $16 billion IPO last year. Twitter hired Goldman Sachs Group Inc. as the lead underwriter, which typically earns a bigger cut of the deal. U.S. IPOs this year have averaged 5.7 percent fees, according to data compiled by Bloomberg.
Gabriel Stricker, a spokesman for San Francisco-based Twitter, declined to comment. David Wells, a spokesman for Goldman Sachs in New York, also declined to comment.
Twitter has also hired Morgan Stanley, JPMorgan Chase & Co., Bank of America Corp., Deutsche Bank AG, Allen & Co. and Code Advisors for its IPO. The microblogging service hasn't yet given a price range for its shares or specified when it plans to debut.
Twitter is fairly valued at about $12.8 billion, based on the value of its common stock at $20.62 a share as of August, according to a regulatory filing. There are 620 million shares outstanding, people with knowledge of the matter have said.
Technical gaffes plagued Facebook's IPO last year on the Nasdaq, and the New York Stock Exchange has been seeking to attract young technology companies away from its rival. While the NYSE missed out on Facebook, the exchange won LinkedIn Corp. (LNKD) and Pandora Media Inc. (P) 's IPOs in 2011.
To contact the reporters on this story: Sarah Frier in New York at sfrier1@bloomberg.net; Jeffrey McCracken in New York at jmccracken3@bloomberg.net; Serena Saitto in New York at ssaitto@bloomberg.net
To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net; Jeffrey McCracken at jmccracken3@bloomberg.net
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