Twitter Holds $450-Million Jackpot Ticket

US, 28 February 2011 – Can you hear that? It’s Twitter laughing all the way to the bank as JPMorgan Chase & Co.’s new Digital Growth fund is in talks to buy a 10% stake in the Internet messaging and communications site.
10% mean nothing without a value. Well, it seems the Internet geniuses at the Digital Growth fund valued Twitter (that has no revenue in all practical senses) at a whopping $4.5 billion! Twitter would see a $450 million injection from JPMorgan for a 10% hold of, of, a company with no revenue.
A sudden life-altering cash influx out of nowhere without giving up something even close of equal value – that’s winning the lottery, isn’t it?
It seems JPMorgan’s Digital Growth fund is also eyeing online gaming site Zynga or telephony company Skype, coupon site LivingSocial and even online retailer Gilt.
It’s funny how quick people forget history. The crash was just a few years back – not too far back to forget. When bankers start investing heavily in the Internet world, two things happen.
First, they over-inflate the real value of a company they don’t understand. Two, encourage people to ride the trend of banker lending towards tech companies and come up with Internet ideas with the sole purpose scamming money out of them. Good luck with that.

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