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Twitter’s IPO Spurs Horse Race Between NYSE and Nasdaq

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Twitter’s IPO Spurs Horse Race Among Exchanges Seeking Listing
Nabbing Twitter Inc. would help the New York Stock Exchange solidify its allure among young technology companies after years of playing catch-up with its rival exchange. Photographer: David Paul Morris/Bloomberg

Sept. 17 (Bloomberg) -- Twitter Inc., which announced plans last week for an initial public offering, is still deciding whether to list on the New York Stock Exchange or Nasdaq Stock Market, setting off a horse race for the high-profile deal.

“That’s going to be one of the most visible transactions when they come out,” NYSE Euronext Executive Vice President Scott Cutler said yesterday on “Bloomberg West.” “We will still compete for it. It is not determined yet.”

Nabbing Twitter would help the NYSE solidify its allure among young technology companies after years of playing catch-up with its rival exchange. For the Nasdaq, Twitter represents an opportunity to regain past glory and recover from the technical gaffes that plagued Facebook Inc.’s IPO last year.

“We would hope we have a great shot at Twitter,” Bruce Aust, executive vice president of Nasdaq OMX Group Inc.’s corporate client group, said yesterday at the Bloomberg Next Big Thing Summit in New York.

Jim Prosser, a spokesman for Twitter, declined to comment.

Twitter said last week that it has submitted paperwork to go public, without giving details of the time frame or financials of the offering. The company filed confidentially with the U.S. Securities and Exchange Commission through a process that will keep its S-1 prospectus under wraps until shortly before a road show with investors.

Facebook IPO

The San Francisco-based company has attracted more than 200 million members, who use the social-networking site to share 140-character status updates. Twitter has been valued at about $10.5 billion by GSV Capital Corp., one of its investors.

While the Nasdaq hosted the biggest technology IPO of 2012 -- Facebook’s debut -- the technical and trading errors that occurred during that offering led to investor lawsuits and a probe by the SEC.

In May, Nasdaq agreed to pay $10 million to settle SEC claims that it broke securities laws in its handling of the IPO. The SEC cited Nasdaq for “poor systems and decision making.” In the settlement, Nasdaq neither admitted nor denied fault.

For years, the NYSE was a less common place for technology companies to list their stocks. That changed since the last recession, when the NYSE began recruiting Silicon Valley startups more aggressively. While it missed out on Facebook, the NYSE won LinkedIn Corp. and Pandora Media Inc.’s IPOs in 2011.

JOBS Act

Cutler also testified in Washington and helped draft legislation called the Jumpstart Our Business Startups, or JOBS, act. The law lets companies with less than $1 billion in annual revenue keep their most sensitive information away from the competition and the public until shortly before they promote the offering. Twitter itself took advantage of the JOBS act to initiate its IPO proceedings in secret.

The NYSE also can offer the prestige that comes with listing on the nearly 200-year-old exchange, Cutler said. In addition to IPO companies, Oracle Corp. switched from the Nasdaq to the NYSE in July, becoming the biggest business ever to jump between the exchanges.

“When we can hold an event on the NYSE floor, do a customer event with their top customers and our top customers, it’s very powerful,” Cutler said.

To contact the reporter on this story: Sarah Frier in New York at sfrier1@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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