Jack Dorsey is dumping his stake in Elon Musk-owned Twitter

Jack Dorsey is dumping his stake in Elon Musk-owned Twitter

Jack Dorsey has invested his entire stake in Twitter stock, worth nearly $1 billion at a buyout price of $54.20, into the private company he founded, which is now controlled by Elon Musk.

Regulatory filings show Dorsey, who was Twitter’s CEO until late last year, transferred about 18 million shares to the privately held company, making him one of its largest shareholders.

The news comes as Musk has moved quickly to put his stamp on the platform, dismissal of top executives including Dorsey’s successor, Parag Agrawal, planning for wider layoffs and ordering a revamp verification process.

Monday’s filing confirmed that Musk, who changed his public profile to “Chief Twit,” is Twitter’s current CEO. It’s unclear whether he will pick someone to take the role in his stead, but he is backed by a group of loyal lieutenants, including venture capitalist David Sacks and his personal attorney, Alex Spiro, as he evaluates Twitter’s operations.

Musk and Dorsey have long admired each other in a “bromance” that played a significant role in shaping the Tesla CEO’s bid to buy the company.

In private messages, disclosed in court filings, Dorsey encouraged Musk to buy the platform, writing that it was always supposed to be “an open source protocol, funded by a foundation,” not a company. “That was the original sin,” he said.

Dorsey also said that he previously tried to bring Musk onto Twitter’s board, but the executives declined because they were too “risk-averse,” calling them “scary.”

Publicly, after the board agreed to the takeover, Dorsey tweeted: “Elon is a unique solution that I believe in. I believe in his mission to spread the light of consciousness.” Dorsey left Twitter’s board in May just weeks after the company announced a $44 billion sale to Musk.

According to the filing, Dorsey and Musk “may be deemed to have formed a group” for purposes of part of the filing, a designation that indicates the pair worked together on the buyout.

Dorsey, however, “disclaims[ed] the existence of any such group and also disclaims beneficial ownership of any shares of common stock beneficially owned [Musk]”, the submission states.

This year’s collapse in the share prices of Twitter rivals Snap and Meta Platforms likely means the value of the stakes of turnaround investors – including Musk, who is investing his 9 percent stake in Twitter in the new private company – is well below the price of $54.20 a share.

Dorsey is the co-founder and CEO of financial technology company Block. His stake in Block, formerly known as Square, is worth several billion dollars.

Separately, a securities filing over the weekend showed Saudi Arabia’s Prince Alwaleed bin Talal bin Abdulaziz infused over 35 million shares, or 3.5 percent of the public Twitter’s total shares, into the new private company.

The position drew criticism from US politicians, including Chris Murphy, a US senator from Connecticut, who expressed discomfort with foreign ownership of the media company and called for an investigation into the national security implications.

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