When Jack Dorsey woke up this morning, his net worth was $7 billion. A few hours later, Elon Musk officially concluded a deal to buy the Twitter company Jack co-founded, for $44 billion.
You might assume that Jack Dorsey’s net worth is about to skyrocket with this massive all-cash private acquisition. But you would be wrong.
why?
Because despite being the longtime co-founder, CEO, and public face of the company, Jack doesn’t actually own that much Twitter.
(Photo by Marco Bello/AFP via Getty Images)
According to the latest filings of the Securities and Exchange Commission on Twitter, prior to the purchase of Elon, Jack Dorsey owned approximately 18 million shares in Twitter. In other words, Jack owns only about 2% of the total shares outstanding on Twitter… aka 2% of the company as a whole.
At the purchase price of $54.20 per share, Jack will receive approximately $975 million in cash from Elon (technically, from a consortium of banks loaning money to Elon using his Tesla shares as collateral).
Jack’s windfall profits will be reduced when he pays 13% to California and 20% to the IRS. As per my count, Jack’s net profit from this transaction after taxes will soon be…
653 million dollars
Obviously, that’s a pretty huge amount of money that would make Jack Dorsey the richest person in most rooms he enters, but it’s interesting how little of the company, the company whose name and face defined it for a decade, he actually owned.
So how is Jack Dorsey a billionaire?
Jack Dorsey is actually a billionaire thanks to another company he co-founded, payment processing company Square, which was recently renamed Block.
As of this writing, Jack Dorsey owns approximately 43 million shares in Block. The block closed today at $107 per share. So Jack’s 43 million shares are worth $4.6 billion.
Jack also controls approximately $1 billion in cash and other investments.
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