Jack Dorsey has rolled his entire stake of Twitter shares, worth nearly $1bn at the buyout price of $54.20, into the privately held company he founded, which is now controlled by Elon Musk.
Regulatory filings show Dorsey, who was Twitter’s chief executive until late last year, rolled over some 18mn shares into the private company, making him one of its biggest shareholders.
The news comes as Musk has moved swiftly to stamp his mark on the platform, firing top executives including Dorsey’s successor, Parag Agrawal, planning for broader lay-offs and ordering a revamp of the verification process.
A filing on Monday confirmed that Musk, who has changed his public profile to read “Chief Twit”, is Twitter’s current chief executive. It is unclear whether he will select someone to take up the role in his stead but he is being supported by a group of loyal lieutenants including venture capitalist David Sacks and his personal lawyer Alex Spiro as he assesses Twitter’s business.
Musk and Dorsey long have admired each other in a “bromance” that played a significant role in shaping the Tesla chief executive’s bid to buy the company.
In private messages, revealed in court filings, Dorsey encouraged Musk to buy the platform, writing that it should have always been an “open source protocol, funded by a foundation” rather than a company. “That was the original sin,” he said.
Dorsey also said he had previously tried to bring Musk on to the board of Twitter, but the directors had refused because they were too “risk averse”, referring to them as “terrible”.
In public, upon the board agreeing to the takeover, Dorsey tweeted: “Elon is the singular solution I trust. I trust his mission to extend the light of consciousness.” Dorsey left the Twitter board in May just weeks after the company announced the sale to Musk for $44bn.
According to the filing, Dorsey and Musk “may be deemed to have formed a group” for the purposes of part of the filing, a designation that indicates the pair were working together on the buyout.
Dorsey, however, “disclaim[ed] the existence of any such group and also disclaims beneficial ownership over any shares of common stock beneficially owned by [Musk],” according to the filing.
The collapse this year in the stock prices of Twitter rivals, Snap and Meta Platforms, likely means that the value of the stakes of the rollover investors — including Musk who is putting his former 9 per cent Twitter stake into the newly private company — is far below the $54.20 per share deal price.
Dorsey is the co-founder of the financial technology firm Block where he serves as chief executive. His stake in Block, formerly known as Square, is worth several billion dollars.
Separately, a securities filing over the weekend showed Prince Alwaleed bin Talal bin Abdulaziz of Saudi Arabia had rolled over 35mn shares, or 3.5 per cent of the total shares of the public Twitter, into the new private company.
The position has drawn scrutiny from US politicians, including Chris Murphy, a US senator from Connecticut, who expressed unease with the foreign ownership of the media company and called for an investigation into the national security implications.
Read the full article here
