Twitter, which announced yesterday that it filed for an IPO, gave Goldman Sachs the job of running the sale, a person with knowledge of the matter said. While Twitter is likely to appoint other banks on the offering, the lead-left role -- so named because of the way the bank names are printed on the offering prospectus -- is typically the most lucrative job for advisers in a stock offering.
Goldman Sachs lost out to rival Morgan Stanley on similar roles in the highest-profile technology IPOs in recent years, including Facebook Inc.’s $16 billion sale last year and offerings by Groupon Inc. and Zynga Inc. the year before. San Francisco-based Twitter may have opted for Goldman Sachs after the other offerings drew criticism and complaints from shareholders, according to Michael Holland of Holland & Co.
“The Facebook experience was one that was so egregious that Twitter did a fairly predictable thing,” said Holland, who oversees more than $4 billion as chairman of the New York-based money manager. “When the biggest and best have needed IPO services, Goldman is always a finalist.”
Facebook, Zynga and Groupon each declined by more than half in the months following their offerings, data compiled by Bloomberg show. Disappointing performance by Facebook following its offering helped to freeze the U.S. IPO market for more than a month and led to shareholder complaints over the valuation of the offering.
Facebook eventually regained losses following its IPO, closing above its IPO price on Aug. 2. The shares fell 1 percent to $44.29 as of 10:22 a.m. in New York today, still above the $38 debut price.
This year, Morgan Stanley has led or won lead roles on at least four technology IPOs, data compiled by Bloomberg show. The bank managed a $219 million share sale for online coupon provider RetailMeNot Inc., including the over-allotment option. The IPO of Cvent Inc., the maker of event-management software which raised $135 million, was also Morgan Stanley-led.
Mary Claire Delaney, a New York based spokeswoman for Morgan Stanley, declined to comment, as did Goldman Sachs spokesman Michael DuVally. Jim Prosser, a spokesman for Twitter, also declined to comment.
Goldman Sachs led Tableau Software Inc.’s IPO in May, which raised $292 million including an over-allotment.
While Twitter hasn’t said how much it will seek to raise, New York-based Goldman Sachs could increase its lead over rivals if Twitter’s offering is completed this year. The bank is ranked first among advisers of U.S. IPOs with an estimated 11 percent share of the market so far this year, data compiled by Bloomberg show.
Goldman Sachs rose 0.2 percent to $163.64 a share today. Morgan Stanley was up 0.1 percent at $28.05.
Citigroup Inc. is ranked second in the U.S., while Morgan Stanley currently ranks in seventh place, the data show. Globally, Morgan Stanley has the largest share of the IPO underwriting market, with 8.3 percent, while Goldman Sachs is in fourth place.
New share sales have accelerated following gains in the broader stock market. There have been 124 U.S. IPOs this year, more in number than the comparable period of any year since 2007, data compiled by Bloomberg show.
Morgan Stanley, led in tech by Michael Grimes, and Goldman Sachs have long been rivals in Silicon Valley, vying to take the hottest companies public. Goldman Sachs’s technology team is led by George Lee and Anthony Noto, who returned to the bank in 2010 after a stint as the National Football League’s finance chief.
Goldman Sachs led the IPO this year for Envision Healthcare Holdings Inc., the hospital operator which raised $1.1 billion. The bank also led the IPO of single-family rental homeowner American Homes 4 Rent, which raised $812 million, and theme-park operator SeaWorld Entertainment Inc., which attracted $807 million from investors. The IPO proceeds all include over- allotment options.
Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.