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Fund managers attracted by Twitter IPO

Asset managers believe Twitter could be a successful offering if it manages to monetise its 500 million users.

Social media business Twitter has caught several fund managers’ attention after it set out its plans for initial public offering last week.

Twitter has not indicated what its value will be at flotation, but analysts and shareholders have suggested it could valued at up to $15bn (£9.3bn). It is estimated to have 500 million users.

Axa Framlington fund manager Jeremy Gleeson, who manages the £219m Axa Framlington Global Technology fund, says: “This is a very young company but they have had fantastic growth. It is definitely a platform that has taken off and will grow going further.

”Advertising revenue per user on Twitter is just under $2.5 and with Facebook this is $5.5 per user, so there is a lot of upside.”

Allianz Global Investors senior portfolio manager Walter Price, who manages the £120m Allianz RCM Technology trust, says: “I like Twitter and its management. It could be a successful offering.

“It is an important part of news today and is the best way to get breaking news. They are now figuring out how to monetise this. I do not think it will be a giant but it will be a successful company.”

But Blackrock fund manager William de Gale, who manages the $179m (£111m) BGF World Technology fund, is sceptical. He says: “The problem with these hot IPO stocks is they have very low floats and high valuations. Facebook demonstrated that the narrative got out of control.

“The question with Twitter is how much of a value do we think there might actually be and are our expectations too high?”


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