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Survey shows 130,000 jobs added in October; Twitter sued over its pending IPO

Survey says 130,000 jobs added in Oct.

A private survey shows that U.S. businesses added just 130,000 jobs in October, as the 16-day partial government shutdown slowed an already-weak job market.

Payroll processor ADP also said Wednesday that companies created just 145,000 jobs in September, far below the 166,000 it had reported earlier this month. The job market had been weakening even before the shutdown started Oct. 1.

Hiring was especially sluggish among companies with fewer than 500 employees. Job creation at services companies fell to 107,000 in October from 130,000 last month.

“The ADP data are pointing to some negative effects from the turmoil in Washington,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.

The shutdown led some private contractors that do business with the government to temporarily lay off workers. It also may have prompted some companies to hold off on adding new workers.

The ADP survey covers only private businesses and did not reflect government furloughs caused by the shutdown.

— Associated Press

social media
Firms sue Twitter over pending IPO

Twitter was sued for $124 million by two financial firms that claim the social media company engineered a failed private sale of its shares in 2012 to strengthen its hand in preparation for its initial public offering.

The firms, Precedo Capital Group and Continental Advisors, sued Wednesday in Manhattan federal court, claiming Twitter fraudulently used the aborted sale, planned for as much as $278 million worth of shares, to set a $10 billion valuation for itself and a floor price for the IPO that’s just days away.

“Twitter never intended to complete the private sale of Twitter stock,” the firms said in their complaint. “Twitter’s intention was to induce Precedo Capital and Continental Advisors to create an artificial private market wherein Twitter could maintain that a private market existed at or about $19 per share for the Twitter stock.”

Twitter, based in San Francisco, is seeking as much as $1.4 billion in its IPO, which is scheduled to price Nov. 6. At the top of the proposed range, Twitter would be valued at $10.9 billion. While the company has more than doubled revenue annually, it hasn’t yet turned a profit and the pace of user growth is slowing.

“We’ve never had a relationship with these plaintiffs,” said Jim Prosser, a spokesman for Twitter. “Their claim is completely without merit.”

The microblogging service is in the middle of its eight-day roadshow, meeting investors in New York before heading to Boston and Chicago this week.

— Bloomberg News

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