Private Trading Increases Twitter’s Valuation to $7.7 Billion

Private investors have pushed Twitter’s valuation up to $7.7 billion, which is more than twice its valuation just three months ago.

Twitter’s latest round of funding closed mid-December, and the $200 million investment from Kleiner Perkins and others saw Twitter valued at $3.7 billion – which itself was a big jump from a $1 billion valuation just a year prior.

Secondary market trade facilitator Sharespost sent an email to its subscribers last week announcing a private auction of Twitter shares closing at $34.50 a share. The 35,000 shares purchased at this price suggest a new valuation for Twitter which is in excess of $7.7 billion. Sharespost reported that this auction was oversubscribed, meaning that even more investors would have liked to get into Twitter at this price.

With all of the rumors flying around lately that Twitter is worth as much as $10 billion and with JPMorgan’s recent purchase of $400 million worth of Twitter shares for 10% of the company – suggesting a valuation of $4 billion – Twitter’s actual value is anyone’s guess.

And at this point, anyone’s guess would be just that – a guess. Until Twitter proves that its advertising model and selling information from its firehose are lucrative business moves for the long-term, we likely won’t see a valuation that sticks.