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Twitter offering $1.3 bln in debt

Thursday, September 11, 2014 - 01:18

Twitter will only say it'll use the proceeds from a bond offering for corporate purposes. But a SunTrust analyst thinks Twitter could use it to buy companies like Flipboard. Fred Katayama reports.

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Twitter's going to the debt market. It'll offer $1.3 billion in convertible bonds. That would raise its total cash stash to around $3-1/2 billion. Like Google and eBay, Twitter is the latest big tech company to capitalize on debt when rates are low. Twitter has been using the money it raised in its IPO last year to buy small companies as it expands its advertising business. But the microblogging service would only say that it plans to use the debt proceeds for general corporate purposes. SunTrust analyst Robert Peck thinks Twitter could use it for more acquisitions. He says it could buy a company like Flipboard, which compiles content from publications and social media sites like Twitter and delivers that in a magazine format to consumers. He notes, "Common investors between Twitter and Flipboard like (Twitter co-founder) Jack Dorsey, Goldman Sachs, and Rizvi could support an idea like this." Canaccord Genuity issued a buy recommendation on Twitter this morning, saying it has a lot of potential to make money off its fast growth of international users. But Twitter shares fell in early trading, adding to its nearly 17 percent loss this year. Too bad investors can't use Twitter's new "buy" button to buy its stock.

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Twitter offering $1.3 bln in debt

Thursday, September 11, 2014 - 01:18