Breaking News from CNBC's Kayla Tausche: Twitter Eyes November 15 for IPO: Sources
Following is breaking news from CNBC's Kayla Tausche. Following is a link to the breaking news hit on CNBC's "Fast Money": http://video.cnbc.com/gallery/?video=3000208093&play=1. All references must be sourced to CNBC.
Twitter Eyes November 15 for IPO: Sources
By KAYLA TAUSCHE
Twitter has not only selected the New York Stock Exchange for its much buzzed-about initial public offering; it has also selected Friday, Nov. 15 as a tentative date to begin trading there, according to people familiar with the matter.
Roughly a month away, the date would represent a healthy distance from Washington's debt ceiling deadlines. In the case a deal isn't reached, extreme market volatility is expected to follow – an IPO's worst enemy as it looks to price a stock at fair value.
The date also means Twitter would have about a week following its meetings with investors before pricing the deal on Nov. 14. The roadshow is expected to kick off on Oct. 25 with meetings at its top Wall Street advisers (in this case, Goldman Sachs, Morgan Stanley and JPMorgan), where the company discusses how best to sell the stock to each bank's clients.
Goldman Sachs, having scored the coveted "lead left" underwriting position, will get the largest slice of shares to sell – and the highest fees in return; but perhaps JP Morgan has the most to gain, with Tuesday's updated S-1 filing showing the bank holds a 10.3% stake in the company, likely through its Digital Growth Fund. Morgan Stanley owns about $40 million through its mutual funds, its filings show.
On Oct. 28 and 29, Twitter's executives will head to the Mid-Atlantic states, likely meeting with prospective investors like T. Rowe Price, which held about $83 million in shares in its mutual funds earlier this year. Oct. 30 and 31 will be spent in New York and Boston, respectively, and the company will finish the week in the Midwest. On Nov. 4 and 5, execs will face hometown investors in San Francisco and Los Angeles before heading back to the Midwest for final meetings on the 6th.
A spokesperson for Twitter declined to comment.
The official date for Twitter's first trade is still fluid, people familiar say. If, after those meetings, underwriters are satisfied with the demand for Twitter stock – which is said to value the not-yet-profitable social site as high as $15 billion – they could choose to launch the IPO a week earlier. Under that scenario, Twitter would price its stock after market close on Nov. 7, these people said, and begin trading on Nov. 8. If investors had more questions, underwriters needed more time to make allocations – or the market needed more time to stabilize – it would trade, as currently slated, on Nov. 15. As one source put it: Better to speed the deal up if demand is high, than delay it and risk spooking investors.
Facebook's roadshow proved a critical juncture for the company, as investors peppered executives with questions about mobile, growth and its sky-high valuation north of $100 billion. Optics proved equally as important as real earnings metrics: Hundreds of investors in Boston were visibly frustrated and when CEO Mark Zuckerberg skipped the large meeting at the Four Seasons in order to meet one-on-one with well-known blue chip investors Wellington and Vanguard.
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