A JP Morgan fund is in talks to acquire a substantial stake in Twitter. Twitter is one of the world's fastest growing social networking sites. The JP Morgan fund asked for 10% of the online messaging service for $450 billion, this values Twitter at $4.5 billion. It is not yet clear if the fund will make a direct investment or buy out existing investors and shareholders.
JP Morgan's Digital Growth Fund was established this month to give rich clients exposure to fast growing private tech companies. This follows a similar effect by Goldman Sachs to invest in the ever popular Facebook.
The fund has raised $1.22 billion to date. but it plans to raise $1.3 billion in total and will have a maximum of 480 investors. JP Morgan expects to earn commission of at least $13 million from the fund.
JP Morgan also hopes to invest another 1/3 of the fund in one other private web company. Games maker Zyna or telephony provider Skype are two possibilties. The final 3rd of the fund will be allocated among 6 other companies.
Kleiner Perkins invested $200 million in Twitter in December at a $3.7 billion valuation. The JP Morgan valuation of $4.5 billion would mark a swift rise in value.
Facebook is now worth up to $70 billion on the secondary market, this is a price considered too rich for the fund.
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