Twitter seeks up to $1.5 billion in convertible debt sale 

Twitter is selling the convertible bonds in two $650 million pieces, one maturing in five years and one coming due in seven years 

  Twitter raised $1.82 billion in its IPO. The company has made several small acquisitions, including the purchase of          social-data provider Gnip for $134.1 million in May. Photo: Hemant Mishra/Mint San Francisco: 

Twitter Inc. is tapping debt markets for the first time, with plans to raise as much as $1.5 billion to invest in acquisitions and expansion. The San Francisco-based microblogging company is selling the convertible bonds in two $650 million pieces, one maturing in five years and one coming due in seven years, according to a regulatory filing on Thursday. The offering size may increase to $1.5 billion if the banks involved exercise an overallotment option. Twitter, which isn’t projected to be profitable this year, has been investing to build up its advertising business and add engineers who can help tweak its product to appeal to a broader audience. Executives see an opportunity in the debt market to raise more cash cheaply with little immediate dilution of their shareholders’ ownership, according to a person familiar with the matter. The company was inspired by technology leaders, including Google Inc. and Netflix Inc., successfully offering debt while borrowing remains inexpensive, the person said. Natalie Miyake, a spokeswoman for Twitter, declined to comment. The decision comes two months after Anthony Noto, a former Goldman Sachs Group Inc. banker who helped with Twitter’s 6 November initial public offering, replaced Mike Gupta as the company’s chief financial officer. Goldman Sachs and Morgan Stanley are leading the company’s debt offering, according to the person. “This is Noto’s first real impact on the company,” said Robert Peck, an analyst at SunTrust Robinson Humphrey Inc. “He’s smart, he’s financially savvy, and understands that whenever the markets give you an opportunity to raise capital that cheaply, you’ve got to either stuff your coffers for a rainy day or make an acquisition.” Twitter’s acquisitions Twitter raised $1.82 billion in its IPO. The company has made several small acquisitions, including the purchase of social-data provider Gnip Inc. for $134.1 million in May. Twitter also recently agreed to buy CardSpring Inc., a service that lets users redeem deals and discounts through merchants’ tweets, for undisclosed terms. 

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