Twitter didn’t ‘raise’ capital, but JP Morgan still bought in

March 3, 2011, 8:17 PM UTC

Twitter co-founder Biz Stone understands nuance. Reuters does not (at least not today).

The news giant (where I used to work) today has been hyping an exclusive interview with Stone, in which he says that Twitter has no IPO plans in the near future. Then there is this:

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.”

Inexplicably, the reporter didn’t follow up with something like: “But isn’t it true that JPMorgan (JPM) has acquired a sizable stake in Twitter via secondary purchases of shares from early investors and company employees?” Instead, he just lets Stone’s non-denial denial stand.

Over the weekend, TechCrunch reported that early Twitter investor/advisor Chris Sacca had raised money from JPM and others to buy secondary shares of Twitter – and that he so far had paid around $400 million to sellers like Spark Capital and Union Square Ventures. As I noted at the time, TechCrunch was right (according to multiple sources).

The FT was admittedly off base – Twitter didn’t directly negotiate with JPM – but Reuters mistakenly suggests that the FT was coming from out of left field. And its readers are mistakenly left with the impression that JPM has no ownership interest in the micro-messaging service. The FT was correct about the ends (JPM owning a piece of Twitter), just not about the means.