ldman sachs, Goldman Sachs beat out top rival Morgan Stanley to be the lead underwriter in the initial public offering for Twitter, giving it the bragging rights to the most anticipated debut from Silicon Valley since Facebook.
The investment bank based in the U.S. has been chosen to be the lead bank and earn the majority of fees, although social media giant Twitter is thought to want other banks online including Merrill Lynch and Bank of America.
Analysts belief that if Twitter were to sell 10% of its share, fees for the underwriting banks could reach between $40 million and $50 million.
Twitter’s management has been courted for some time in the anticipation of them going public. Those same banks are also vying for the lead role in a planned IPO of Alibaba thought to be for $60 billion or more.
Alibaba is the largest ecommerce company in China, which is planning to go public sometime before the end of 2013.
The win by Goldman Sachs is a huge setback to Morgan Stanley, which has come under fire from its investors due to the handling of the IPO of Facebook.
Goldman and Morgan Stanley are both known for leading technology companies so other bankers said it was logical that Twitter decided on Sachs since Morgan Stanley was tainted due to the fiasco with the listing of Facebook.
The Massachusetts securities regulator fined Morgan Stanley $5 million, saying the investment bankers had put improper influence on analysts who covered Facebook during its initial flotation.
The transaction involving the Twitter IPO would cement Goldman Sachs as number one this year for advisory mandates involving IPOs, with Morgan Stanley taking second place.
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