Veteran of Microsoft-Yahoo negotiations and Zynga’s IPO is expected to be instrumental in the most anticipated stock offering since Facebook.
SAN FRANCISCO — Months after becoming Twitter’s finance chief, Mike Gupta is playing a key role in the most anticipated stock-market debut since Facebook.
The microblogging website filed preliminary papers this month for an initial public offering of stock, using new rules that allow it to keep many financial details secret until close to the IPO date.
Gupta, who joined Twitter last year, is expected to accompany Chief Executive Officer Dick Costolo during an eventual cross-country, pre-IPO roadshow, explaining the company’s business to potential investors.
The former Yahoo finance executive will draw on an ability to communicate intricate ideas simply as he seeks to outline how the online-advertising business — set to reach $1 billion in sales next year — can sustain long-term growth, said Peter Fenton, a partner at Benchmark Capital.
“A lot of people are trying to understand, ‘How does this thing work? How does it make money?’ ” said Fenton, a Twitter director whose venture-capital firm is an early backer of the company. “He has a layman’s ability to simplify and express it in a way that’s not overly complicated.”
An alumnus of the University of Chicago Graduate School of Business, Gupta, 42, has climbed the ranks of Silicon Valley companies over the past decade, becoming a trusted lieutenant to Yahoo co-founders David Filo and Jerry Yang.
Gupta huddled with the pair as they haggled in an airplane hangar with Microsoft CEO Steve Ballmer in 2008 over the software-maker’s proposed $44.6 billion takeover. He later helped hammer out Yahoo’s search pact with Microsoft and investment in Alibaba Group Holding.
Gupta also helped take Zynga public in 2011, leading the negotiations for an 11th-hour, $1 billion line of credit from banks including Morgan Stanley and Goldman Sachs Group.
“He was instrumental during our earnings calls and during our roadshow” meetings to pitch investors, John Schappert, Zynga’s former operating chief, said in an interview. “He would do a great job of playing the other side and thinking through all the intricacies.”
His deals haven’t all ended well. Yahoo shares plummeted in the months after it rebuffed Microsoft’s offer, and the companies’ search pact fell short of sales projections in the past year. Zynga’s market value has plunged 70 percent since the company’s IPO as fewer users play its games on Facebook.
Yahoo’s holding in China’s Alibaba, by contrast, has proved lucrative.
Gupta will need to prove to investors and analysts that Twitter deserves a rich valuation. The company was valued last month at about $10.5 billion by GSV Capital, one of its investors, up 5 percent from a May estimate. Twitter will grow advertising revenue to $950 million in 2014, an increase of 63 percent from $582.8 million this year, eMarketer estimates.
Born and raised in New York City, Gupta got his start in investment banking in the 1990s at Merrill Lynch. In 2003, he joined Yahoo, where he held roles in finance and corporate development.
At the secret meeting in an Oregon airplane hangar in April 2008, Gupta was the only Yahoo executive alongside Yang and Filo to discuss the Web portal’s possible sale to Microsoft. The trio met with Microsoft CEO Ballmer and his deputy, Charlie Songhurst, said two people with knowledge of the matter.
Yahoo rebuffed Microsoft’s bid, but the negotiations eventually led to a search partnership, which Gupta helped clinch alongside former Yahoo CEO Carol Bartz. Gupta also accompanied Yang on trips to China to secure Yahoo’s backing in Alibaba, an investment that has appreciated as the Asian e-commerce giant nears its own IPO.
Soon after Gupta was poached by Zynga in June 2011, he worked with bankers to draft the game-maker’s IPO prospectus, said David Wehner, Zynga’s ex- CFO, now at Facebook.
Twitter made its play for Gupta after an executive shuffle in the past few years.
Gupta’s low-key manner complements the duo in charge at Twitter, said Fenton, who recommended him. “There is a consistent style in that leadership team of humility as opposed to being arrogant or braggadocios.”
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