JP Morgan May Purchase Stake in Twitter Via Digital Growth Fund

Underscoring once again that Wall Street has closer ties to contemporary social media than most realise, on Monday it was reported that JPMorgan Chase & Co. is believed to be in talks to purchase a minority stake in Twitter.

The Wall Street Journa
l joined a plethora of media outlets today in reporting word that JP Morgan may soon invest an undisclosed amount from its swelling $1.2 billion Digital Growth Fund into the hugely popular microblogging platform.

While many analysts contend that Twitter may not be worth a presently estimated $3.7 billion, JP Morgan – the Wall Street Journal says – may be gearing up to convince investors that it has the potential to be worth much, much more.

In late 2010, Twitter raised $200 million in a round of funding led by Kleiner Perkins Caufield & Byers. The following month, eMarketer went on record to predict that Twitter had the potential to triple it’s advertising revenue by the end of 2012, given the social network’s surging use and increasingly credible presence across the undeniably cluttered landscape of social media.

If JP Morgan ultimately pulls the trigger on an investment in Twitter, the financial titan would not be alone in the world of social networking. Just eight weeks ago, Facebook raised a gargantuan $1.5 billion in a round of financing that included such investment giants as Goldman Sachs Group Inc. and Russian investment firm Digital Sky Technologies.

Facebook’s valuation presently stands at $50 billion.

While representatives for JP Morgan will not comment on the potential investment in Twitter, it’s been reported that JP Morgan’s Digital Growth Fund may not necessarily invest directly in Twitter. Ultimately, the fund may seek to purchase other investors’ current stakes in Twitter.

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