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Ex-Goldman Banker Anthony Noto to Become Twitter CFO

Updated from 10:29 a.m. ET with SunTrust comments, afternoon share prices.

NEW YORK (TheStreet) - Anthony Noto, the ex-Goldman Sachs (GS) investment banker who led Twitter's (TWTR - Get Report) initial public offering, is now joining the micro-blogging site as its Chief Financial Officer. Noto's move comes about six months after Twitter's initial public offering, and roughly a month after he left Goldman for tech-oriented hedge fund Coatue Management.

Twitter's appointment of Noto as CFO looks like a move at rebuilding the company's' upper ranks after some big recent departures. Mike Gupta, Twitter's current CFO will step down from the role become Twitter's Senior Vice President of Strategic Investments.

Perhaps, Noto's hiring will help shore up Twitter's executive ranks after the sudden resignation of chief operating officer Ali Rowghani earlier in June. Twitter said in a filing at the time it did not announce an intention to replace Rowghani.

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Although Twitter shares reacted positively to Noto's hiring, SunTrust Robert Peck called the move a surprise move and noted that outgoing CFO Gupta had a strong reputation among investors. Peck added that Twitter generally beat earnings guidance under Gupta's watch and he posited that the outgoing CFO may soon leave the company. "[W]e think it is unlikely Mr. Gupta would stay longer-term in a non C-suite role," Peck wrote in a Tuesday note to clients.

Shares in Twitter were rising over 3% to $42.24 in late Tuesday afternoon trading.

For Noto, the move to Twitter caps a whirlwind few years for the longtime Goldman banker, and will also come with a large payout.

Noto became a well-known figure on Wall Street as bullish technology analyst at Goldman Sachs during the 1990s stock bubble.

In 2008, Noto left Goldman Sachs to become the CFO of the National Football League for a two-year spell, before returning to Goldman as a managing director in its investment banking division. From Sept. 2011 until May, Noto was co-head of Goldman's technology, media and telecom investment banking group. Noto resigned from Goldman to join Coatue Management, however, his appointment as Twitter's next CFO has made moot the banker's move to the buyside.

Twitter will pay Noto $250,000 annually as CFO, and gave him one-time stock award of 1,500,000 restricted stock units that vest over a four-year period. Noto was also given 500,000 stock option grants.

SunTrust's Peck calculated that Noto's RSU's will be worth approximately $60 million and cited that stock award as a reason for is sudden career change. "While we are surprised of his change in career path, we understand the attraction for him to help build the company to the next level," Peck wrote.

Perhaps Noto, who was instrumental in Twitter's IPO process, can help the company with its relations to institutional investors and analysts. Many still believe Twitter's earnings prospects to be far less certain than competitors such as Facebook (FB) and LinkedIn (LNKD).

Here's what Noto had to say of his appointment on Twitter this morning:

-- Written by Antoine Gara in New York

 

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