Twitter co-founder Biz Stone tried to dismiss rumors swirling that JPMorgan was seeking a minority stake in Twitter, which would have valued the company at $4.5 billion. In an adorable article ("Twitter, which allows users to send short, 140-character text messages, or Tweets ..."), Reuters said:
Asked about a Financial Times report last week that said a technology fund from JPMorgan was in talks to buy 10 percent of Twitter, Stone said: "(The report is) made up."
But as Fortune.com's Dan Primack pointed out (via Twitter, of course), "Way I read it is that Biz was very careful: Never addresses secondary shares, because Reuters reporter never thinks to ask."
So what's really going on? Well, it's interesting that Reuters asked specifically about the Financial Times report, which said:
It is not clear if the JPMorgan fund will make a direct investment or buy out existing investors and shareholders with Twitter’s approval. But the fund does not intend to buy shares on the secondary market, the people said.
However, as TechCrunch was the first to set straight, it's not Twitter that's selling and it's not an investment in the company. What happened is JPMorgan is working with Chris Sacca, a tech investor who serves as an "important gatekeeper" linking up big investors like JPMorgan with private shares of fast-growing Internet companies that haven't yet had an IPO.
As Stone told Reuters, Twitter isn't planning on an IPO anytime soon. In order for early investors like Union Square Ventures, Spark Capital, and co-founder Evan Williams to get their money out now, they sold their shares to Sacca's $1 billion fund. "JPMorgan Chase and its Digital Growth Fund, a new $1.2 billion vehicle, is a major investor in Mr. Sacca’s fund, and it will indirectly own shares of Twitter as a result," explains DealBook.
Primack clears Reuters's misunderstanding: "Twitter didn't sell shares. Its VCs did. Not funding, but liquidity," for early investors. And the fact that Biz Stone took to Reuters to deny JPMorgan's (indirect) stake points to just how unhappy Twitter is about the outcome.
Twitter's Stone: No IPO or funding talks [Reuters]
Dan Primack [Twitter]
How Chris Sacca And J.P. Morgan Acquired 10% Of Twitter Via Huge Secret Secondary Fund [TechCrunch]
New Fund Provides Stake in Twitter for JPMorgan [DealBook/NYT]