Twitter officially announced this week that it will be filing for an initial public offering. It selected Goldman Sachs Group Inc (NYSE:GS) to be its top adviser, which will help put Goldman on track for being the top adviser in U.S. IPOs since 2009, according to Bloomberg.
Lee Spears of Bloomberg reports that sources say Twitter selected Goldman Sachs to run the sale, although the social network will likely also choose other banks to assist with the IPO. This news is contrary to what Fox Business News had reported earlier this month, which indicated that Morgan Stanley was in the lead for Twitter’s IPO.
Goldman’s history in IPOs
Apparently Goldman lost to Morgan Stanley on other major technology IPOs in the past several years. Facebook Inc (NASDAQ:FB) hired Morgan Stanley to handle its $16 billion offering last year, while Groupon Inc (NASDAQ:GRPN) and Zynga Inc (NASDAQ:ZNGA) also chose Morgan Stanley the year before.
Holland & Co. money manager Michael Holland speculates that Twitter chose Goldman Sachs Group Inc (NYSE:GS) because shareholders complained about and criticized the other IPOs. Facebook’s disastrous IPO last year is still making headlines because of the legal mess it created.
Facebook Inc (NASDAQ:FB), Groupon Inc (NASDAQ:GRPN) and Zynga Inc (NASDAQ:ZNGA) shares have all struggled immensely since their IPOs, although Facebook finally regained its losses.
Morgan Stanley versus Goldman Sachs
Bloomberg data indicates that Morgan Stanley has either led or held one of the lead roles on four or more technology IPOs this year alone. The firm handled RetailMeNot Inc (NASDAQ:SALE)’s $219 million IPO. Morgan Stanley also led Cvent Inc (NYSE:CVT)’s IPO, in which the event management software company raised $135 million.
Goldman did head up Tableau Software Inc (NYSE:DATA)’s IPO in May, helping the company raise $292 million, including over-allotment.
At this point we don’t know exactly how much Twitter will try to raise in its IPO. If Twitter’s offering is done this year, then Goldman will increase its lead over rival banks in IPOs. The bank is already leading other IPO advisors with about 11 percent of the IPO market so far this year.
