Twitter share auction suggests $7.7 billion valuation

SAN FRANCISCO Fri Mar 4, 2011 5:31pm EST

Twitter co-founder Biz Stone speaks at the ''World Economy and Future Forum'' hosted by broadcaster MBN in Seoul March 3, 2011. REUTERS/Lee Jae-Won

Twitter co-founder Biz Stone speaks at the ''World Economy and Future Forum'' hosted by broadcaster MBN in Seoul March 3, 2011.

Credit: Reuters/Lee Jae-Won

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SAN FRANCISCO (Reuters) - A recent auction of Twitter shares on the secondary market suggests investors value the company at $7.7 billion, more than twice the valuation the Internet microblogging service garnered in a December funding round.

Investors have agreed to pay $34.50 a share for Twitter in the auction conducted by Sharespost, an exchange for private company shares that announced the news on Friday

Based on the 223.7 million estimated fully diluted shares of Twitter listed by Sharespost on its website, the deal would suggest a valuation of roughly $7.7 billion.

Valuations of privately-held Web companies have surged in recent months as investors scramble to buy stakes in companies that many hope could turn out to be the next Google Inc.

On Thursday, an investment firm bought 2.5 million Facebook shares in a deal valuing the No.1 social network at $65 billion, according to a media report. That valuation is 30 percent higher than the valuation Facebook announced in its last funding round in January.

The Twitter auction, which Sharespost said was oversubscribed, involved 35,000 shares of Twitter's Series B preferred stock, Sharespost said.

In December Twitter was valued at $3.7 billion in a $200 million funding round led by venture capital firm Kleiner Perkins Caufield & Buyers.

(Reporting by Alexei Oreskovic; editing by Andre Grenon)

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Comments (2)
Someone on twitter the other day said something like, Charlie Sheen is insane – he thinks he can make money on Twitter- Twitter doesn’t make money on Twitter. Pretty lofty valuations for these soon-to-IPO web 2.0 companies. Facebook was worth $25B when that movie came out in the Fall, it’s worth 65B now. It more than doubled in 5 months? Sure, they’re valuable companies, but the numbers just don’t sound right to me.

Mar 04, 2011 10:29pm EST  --  Report as abuse
SavvasMallas wrote:
I believe the valuation is way too much…. Annual profits and its revenue stream seems too little to match a billion dollar entity. In addition how much longer will these .coms grow and be allowed to grow, amongst so much international competition and increasingly changing economic and social economic environment. Facebook appears to be better adapt and better intergrated in consumer pockets to establish themselves. The question lies will Twitter compete on these levels… or merely be another My Space

Mar 06, 2011 12:08pm EST  --  Report as abuse
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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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