J.P. Morgan Acquires 10% of Twitter Through Stock Purchases From Existing Shareholders

Posted Feb 27, 2011

There is a lot of speculation about how J.P. Morgan and angel investor Chris Sacca acquired about 10% of equity in Twitter for $450 million. The most interesting part here is how the funding round was conducted. It was not done as a venture capital series of funding.

The rumor is that J.P. Morgan committed most of the capital for the ownership in a $1 billion fund through angel investor Chris Sacca. And over the last several months, they have acquired $400 million in Twitter stock from existing shareholders at a price range of $16-$21/share.

This fund is now the second largest shareholder in Twitter according to sources. Sacca supposedly acquired $100 million worth of stock from Twitter co-founder Evan Williams. Union Square Ventures, Spark Capital, and other shareholders sold off another $300 million worth of Twitter stock. This means that J.P. Morgan’s fund still has about $700 million to spend on other popular web and mobile companies, which they’ll most likely plug in to companies as large as Groupon and Zynga.