(MENAFN- The Peninsula) Goldman Sachs, on pace to be the top adviser on US initial public offerings for the first time since 2009, scored a coup by landing the lead role on Twitter's sale.
Twitter, which announced on Thursday 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's $16bn sale last year and offerings by Groupon and Zynga 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 $4bn 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 US 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 August 2.
"Twitter has studied the Facebook IPO experience in detail and doesn't want a repeat," said Francis Gaskins, president of Marina Del Rey, California-based researcher IPOdesktop.com.
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 $219m 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 $135m, 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 $292m 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 US IPOs with an estimated 11 percent share of the market so far this year, data compiled by Bloomberg show.
Citigroup is ranked second in the United States, 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.
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