According to a report from The New York Times‘ Dealbook, JPMorgan Chase’s new fund geared toward investments in social media companies may soon take aim at one of social networking’s biggest names, Twitter.
The Dealbook report suggests that JP Morgan is entertaining a minority stake in Twitter that could value the microblogging juggernaut at nearly $4.5 billion.
For the $1.22 billion JPMorgan fund, Twitter appears to be its beachhead in the highly popular social media sector, much as Goldman Sachs established its presence in the category by raising $1.5 billion to invest in Facebook, an amount that included $1 billion collected from wealthy private individuals outside the United States.
It should be noted, however, that the fund in question – the J.P. Morgan Digital Growth Fund – may not necessarily invest directly in Twitter. Instead, the fund may purchase current investors’ stakes with the company’s consent, sources informed The New York Times.
The hush-hush speculation surrounding the possible investment underscores the financial industry’s growing interest in the long-term profit potential of today’s largest and fastest growing social networks.
For more information, you can read the full report from The New York Times‘ Dealbook by clicking here.
Thanks for the post. It is really interesting that the major investment firms are raising so much money for social media companies. I think it is interesting because basically these companies are new! The whole social media concept is pretty new as well. It just goes to show that things change. Brick and mortar companies that make things may not be the best investments anymore.
Keith