Part I: Some of the reported facts on Twitter pre-IPO lawsuit.

There have been several reports that Twitter was sued for $124 million today. Two financial firms claim that Twitter began a process to sell some shares privately to enhance its valuation before its IPO. However, the firms claim that Twitter did not intend to complete the deal.

Honestly, the reports are confusing and the complaint does not appear to be available online yet. Here’s what others are reporting.

GSV Asset Manager was an “approved” buyer of Twitter stock, whatever that means. It contacted Precedo Capital Group and Continental Advisors to help it market a fund that would purchase Twitter shares from employees and other holders. GSV allegedly agreed with Twitter for Twitter to “arrange” the sales.

Precedo and Continental claim they lined up commitments for $50 million and set up investor meetings all over the world.

P&C then allege that Twitter blocked the sale after they found investors willing to pay $19 per share.

P&C then claim that Twitter never intended for the sale to go forward and that its intention was to induce P&C to “create an artificial private market wherein Twitter could maintain that a private market existed at or about $19 per share.”

In addition to $24.2 million of compensatory damages, P&C are asking for $100 million in punitive damages.

The reports have been confusing as to the relationships among the parties. In addition to the factual issues, there are questions about why Twitter would pursue these transactions this in the first place.

Without seeing the complaint itself, it seems to be misguided suit against the wrong party, even assuming any of the facts are true. We will follow up in a separate post.

