Global financial services firm JP Morgan Chase’s new social media fund is believed to be in talks to buy a minority stake in Twitter, an investment which pegs the value of the micro-blogging site at over $4 billion.

JP Morgan is expected to make the investment through its new $1.2-billion digital growth fund, which the bank has started to invest in an array of Internet and new media companies, the Wall Street Journal reported, quoting people familiar with the matter.

The investment in Twitter is expected to value the San Francisco-based company at more than $4 billion.

While discussions between JP Morgan and Twitter are still underway, there is no guarantee a deal will be struck, the report added.

“JP Morgan also has purchased a significant amount of Twitter’s shares on exchanges for private-company stock, separate from its talks for a direct stake in the company,” the report said.

In recent months, social networking site Facebook and Internet search giant Google were understood to have held “low level talks” to acquire Twitter for $10 billion, a report that the Twitter CEO, Mr Dick Costello, dismissed as “just rumours’’.

In a regulatory filing, JP Morgan had last week said that it had raised $1.2 billion for its social media fund compared to the initial target of $500-750 million.

The fund is being run by JP Morgan’s asset management unit and will target private Internet and digital media companies that have an “up-and-running business model, steady revenue and cash flow’’.

Besides Twitter, the JP Morgan fund is also looking at online gaming firm Zynga Inc, which is in discussions to raise nearly $500 million from institutional investors, the media report said.

The report added that a Twitter spokesman said the company did not comment on the interest evinced by other companies. A JP Morgan spokesman also declined comment on the issue.

Twitter, started in 2006, currently sees around 130 million tweets posted every day, up from 100 million at the end of 2010.

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