Jack Dorsey bagged a $268 million windfall when Elon Musk rescued failing Twitter
Elon Musk is taking over $Twitter (Delisted) (TWTR.US)$, and former CEO Jack Dorsey thinks he's the right man for the job.
Dorsey and Musk have known each other for years. Recently, Dorsey changed his role from $Block (SQ.US)$'s CEO, president and chairperson to "Block Head and Chairperson." His title change resembles a $Tesla (TSLA.US)$ filing last year in which Musk added "Technoking of Tesla" to his official role at the company.
Dorsey and Musk have known each other for years. Recently, Dorsey changed his role from $Block (SQ.US)$'s CEO, president and chairperson to "Block Head and Chairperson." His title change resembles a $Tesla (TSLA.US)$ filing last year in which Musk added "Technoking of Tesla" to his official role at the company.
Dorsey is also lavishing effusive praise on Elon Musk for his surprise deal to buy Twitter. Since the social media company accepted Musk's offer on April 25, Dorsey said in a series of tweets that he trusts Musk to run the company.
He labeled his record in operating the social media giant "my biggest regret," expressed relief that Musk is taking his brainchild "back from Wall Street." However, Dorsey may feel the greatest gratitude to Musk for the gift he didn't mention.
He labeled his record in operating the social media giant "my biggest regret," expressed relief that Musk is taking his brainchild "back from Wall Street." However, Dorsey may feel the greatest gratitude to Musk for the gift he didn't mention.
Dorsey, who took Twitter public in 2013, owns 18,042,428 Twitter shares or 2.36% of the total, according to the just-released proxy. At the April 1 market close, just before Musk disclosed his 9% holding that set the deal in motion, Twitter was selling at $39.31, putting Dorsey's holdings at $709 million.
Musk is paying a rich, 38% premium at $54.20, all in cash, valuing Dorsey's position to $978 million. Overnight, Dorsey will bag a $270 million bonanza.
Musk is paying a rich, 38% premium at $54.20, all in cash, valuing Dorsey's position to $978 million. Overnight, Dorsey will bag a $270 million bonanza.
Twitter is a total mess, meaning Musk may have made Dorsey much more than $300 million
From July of last year until the Musk bailout appeared, Twitter's shares fell 50%. And its long-term performance for investors is one of the worst in the annals of Big Tech.
In fact, David Trainer, CEO of investment research firm New Constructs, believes that based on fundamentals, Twitter's worth between $10 and $15 a share, at best less than one-third of what Musk is paying.
Let's posit that sans Musk, Twitter was heading for $15. In that case, Musk is giving Dorsey not $270 million, but $700 million more than Twitter's true value.
In fact, David Trainer, CEO of investment research firm New Constructs, believes that based on fundamentals, Twitter's worth between $10 and $15 a share, at best less than one-third of what Musk is paying.
Let's posit that sans Musk, Twitter was heading for $15. In that case, Musk is giving Dorsey not $270 million, but $700 million more than Twitter's true value.
While Dorsey basks in his good fortune, Musk's net worth is taking a big hit.
When Musk announced his stake in Twitter at the start of April, Tesla traded at $1,080. By the market close on April 26, it had dropped by 19% to $876, erasing $210 billion in market cap.
Mooers, how much do you think Twitter's share price should be?![]()
Source: Fox News, Business Insider, Bloomberg, Fortune
Mooers, how much do you think Twitter's share price should be?
Source: Fox News, Business Insider, Bloomberg, Fortune
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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70797533 : David Trainer is right, Twitter true value is around $20, just compare Chinese Twitter Weibo which has more Ads revenues than twitter, Weibo current price is $20
Talklili : I repeat”Elon is not your friend,he doesn’t care if you go broke,Elon makes decisions for Elon in disguise of advancement before he takes profits,debate me,I know,cruel world,tough sport.