Twitter Is Seeking Loan Ahead of Flotation

The company could float within 2 months and has reportedly entered negotiations with Wall Street banks seeking a loan of up to $1 billion ahead of its IPO. Media reports reveal that the float may take place before the US Thanksgiving holiday on 28 November.

The social network announced its plans to float earlier in September but didn’t disclose its timetable, filing S-1 documents for the initial public offering with the Securities and Exchange Commission in the United States. Twitter is not obliged to specify its launch date until 3 weeks before the IPO.

In the meantime, investors value the company, founded 7 years ago by Jack Dorsey, Biz Stone and Evan Williams, at over $10 billion. According to media reports, the loan facility is yet to be finalized but the company is in talks about a credit line of between $500 million and $1 billion. This funding would give the social network extra flexibility to bolster its position ahead of a float with possible acquisitions able to improve its financial ability.

The recent acquisitions of the company include MoPub, a mobile advertising network, and Trendrr. The latter tracks “second screen” communities chatting during TV shows. In addition, financing ahead of a public flotation can enable Twitter avoid having to return to the capital markets to finance international expansions following a stock market launch. This move follows a well-worn route of other organizations that have floated. For example, Facebook took out an $8 billion financing package before it launched its IPO (though it didn’t help to succeed), and social games company Zynga raised about $1 billion as well.