back to article Twitter sets up BEELLION-DOLLAR credit line ahead of IPO

Twitter has set up a billion-dollar loan ahead of its initial public offering from a group of big banks. The microblogging site has set up a revolving credit facility from Goldman Sachs, Morgan Stanley, JP Morgan, Bank of America Merrill Lynch and Deutsche Bank, as well as others, sources whispered to Reuters. All five banks are …

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Angel

"Twitter is expected to go public sometime in the next couple of months and analysts are anticipating that the firm will look for a valuation of at least $10bn"

#Mental

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Happy

Not if you're the current owners of Twitter it isn't...

#profits?

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$10bn?

One day people will look back at this and laugh.

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Re: $10bn?

Anyone who isn't a trader is surely already laughing. If not, you should be.

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Windows

Re: $10bn?

It's because cash in the decabillion range is very easy to come by today, considering the ongoing "quantiative easing" enema.

You can hear the scream "finally someone who wants it!"

People don't laugh about the 2001 Internet bubble and the 2008 housing bubble. They won't laugh about this bubble, which might be even bigger.

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Anonymous Coward

Whats the money for? Is it so that they can buy their own stock?

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To cover all their losses. I suspect most of the IPO money will go to existing shareholders, like it did with Facebook. The difference was, Facebook makes profits. Not enough to be worth $100bn, but still plenty. Twitter doesn't. Normally an IPO is supposed to be to fund the continuing development of the company, not just to enrich the current owners. But Facebook didn't need the cash. I suspect with Twitter it's that they don't want to lose control of the gravy-train, so only want to sell 10%. But that's not enough to fund the losses, and pay and headcount rises they're going to spend to chase profits.

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