Twitter IPO: Two More Top Banks Swoop In

Twitter

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Twitter has added JPMorgan Chase (NYSE:JPM) and Morgan Stanley (NYSE:MS) to the roster of banks assisting its widely anticipated initial public offering, people familiar with the matter told The Wall Street Journal. The two banks join the team under Goldman Sachs (NYSE:GS), which is the lead firm for the offering. This is the same team of banks that handled the Facebook (NASDAQ:FB) IPO, although Morgan Stanley was the lead bank in that case.

Earlier this week, news circulated that Twitter will list on the New York Stock Exchange and not on the Nasdaq. The social media platform, which tweeted about its confidential S-1 filing on September 12, is expected to sell between 50 million and 55 million shares priced between $28 and $30, raising between $1.4 billion and $1.65 billion. Such a sale would value the company somewhere between $15 and $16 billion, higher than the $10 billion estimate that was tossed around a few months ago.

These accomplishments — earning the listing rights and working on the IPO — are not necessarily significant financial windfalls for the companies involved. It’s not a perfect analogy, but initial public offerings are to Wall Street as blockbuster movies are to Main Street: a tremendous amount of hype typically surrounds both events. Working on an IPO as widely watched as Twitter is as much a boost to the reputation of those involved as anything.

“The Facebook IPO was a hiccup. Unfortunately for Nasdaq and Morgan Stanley, it was a hiccup on the largest and most visible transaction of the past decade,” David Weild, head of investment banking and IPO adviser at Weild & Co., told CNN Money. “It took some of the luster off their reputations.”

JPMorgan and Goldman Sachs also walked away with a little egg on their faces from the Facebook IPO fiasco. But for its part, this is the second high-profile IPO that JPMorgan has reportedly scored recently. Alongside Twitter, sources told CNBC that the bank is likely to take the lead on the Chrysler IPO.

Goldman Sachs, JPMorgan, and Morgan Stanley have all outperformed the S&P 500 on the stock chart this year to date. Goldman Sachs is up just over 23 percent on the year, compared to 15.75 percent of the S&P 500. JPMorgan is cutting it close, just a fraction ahead of the index as of Thursday. Morgan Stanley has climbed more than 38 percent over the period.

Goldman Sachs Group, Inc. (The) Stock Chart - GS Interactive Chart - Yahoo! Finance

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