As I type this article, Twitter's share price is sitting at an all-time high of $76. Twitter stock has absolutely soared in the last few months, more than doubling in a year. So, you might assume the net worth of company CEO and founder Jack Dorsey must also be equally soaring. You might picture the awkwardly-bearded Dorsey off on a 10-day meditation retreat in French Polynesia, celebrating silently with a stiff glass of carrot juice and an extra-long downward dog.
Unfortunately for Jack, Twitter's recent highs don't actually have that much of an impact on his net worth, which we currently peg at $14 billion. In fact, Jack's overall fortune actually fell by $2 billion in the last week, the same period when Twitter was reaching all-time highs. Why? How? Let's discuss.
Most people probably assume that Jack Dorsey is the primary founder and only CEO that Twitter has ever had. In reality, Jack is a co-founder. He launched Twitter in 2006 alongside Biz Stone, Evan Williams, and Noah Glass. Jack served as the company's first CEO but was reportedly forced to step down in 2008 by his co-founders and their venture capitalist backers because he was spending too much time on extracurricular hobbies like yoga and meditation retreats. Seriously.
| Detail | Information |
|---|---|
| Name | Jack Dorsey |
| Birthdate | November 19, 1976 |
| Occupation | CEO of Twitter and Square |
| Net Worth | $14 billion |
| Twitter Co-founder | 2006 |
| Square Co-founder | 2009 |
Twitter's Rise and Jack's Stake
During Jack's first few years of his second term as CEO, Twitter stock was a dog with fleas. On the day he became CEO again in 2015, Twitter traded at around $35. Over the next two years, the share price tanked, hovering in the $15-16 range until slightly improving in early 2018. A year ago, Twitter stock hovered in the $25-35 range. In early March, Jack Dorsey's net worth was just $3.3 billion, the lowest it had been in about eight years.
As I type this article, a single share of Twitter would cost you $76, which is an all-time high. This week's rise in Twitter's share price is being driven by an announcement that the company will soon release a "Super Follow" feature that will allow users to charge for tweets (with Twitter taking a cut of the fee). Twitter rose as much as 10% on the announcement.
Market Cap and Jack's Holdings
Earlier today, Twitter's market cap topped $60 billion for the very first time. It's a huge accomplishment for the company and a major validation for Dorsey. Unfortunately, it's not having much of an impact on Jack's net worth; Jack's net worth actually fell $500 million yesterday and is down about $2 billion in a week.
Why? Because Jack Dorsey doesn't own all that much Twitter stock. Jack owns around 2% of the company. By comparison, Mark Zuckerberg owns 30% of Facebook. The Google founders both own around 14% of Alphabet, and Elon Musk owns 22% of Tesla. A year ago, when Twitter was trading in the $25-35 range, Jack's 2% Twitter stake was worth around $500 million. Today, his 2% stake is worth:
$1.2 billion
A nice chunk of money but not enough to technically make him a billionaire after taxes if he sold everything. So how is Jack Dorsey worth $14 billion? In reality, Twitter is just a side project for Mr. Dorsey. Jack's real job and the vast majority of his net worth actually comes from a company called:
Square: The Real Money Maker
Square is a mobile payment and financial services company. If you've ever bought something at a farmer's market or from a food truck, you probably handed your credit card over to the merchant who swiped it in a little square card reader that was plugged into an iPad or iPhone. Jack co-founded Square in 2009. The idea came to Jack after a friend (who then became his co-founder) complained about not being able to sell glass faucets and fittings because he didn't accept credit cards.
Square went public in November 2015, almost exactly two years after Twitter went public. On its first day of trading, Square had a $3 billion market cap, which was a major disappointment because the company's last private funding round valued the business at $6 billion. Jack is also the CEO of Square, which has earned him some criticism when Twitter wasn't performing well. Many analysts and shareholders thought Twitter deserved a more "full-time" CEO.
Square's Growth and Jack's Stake
That shareholder resentment was particularly strong as Square's stock rose from $12.85 on the day it went public to where it stands today: $225. With that rise, the company's market cap has risen from $3 billion to today's $101 billion. Jack owns a little less than 13% of Square. At today's $225 price per share, Jack's Square stake is worth:
$13 billion
And while Square has had an incredible 12 months, if you look at the far right of the above stock chart, you'll see it tanked in the last week. Square hit an all-time high of $276 on February 19. At today's $225 price, that's an 18.5% drop. Jack's net worth one week ago – February 19 – was $16 billion. This is how and why Jack lost $2 billion in wealth while Twitter soared to new all-time highs.
A Significant Donation
Not long ago, Jack actually owned much more of Square. A year ago, he owned 63 million shares of Square (20 million more than he currently holds). On April 7, 2020, Jack announced he was moving $1 billion worth of his Square equity (20 million shares) to a newly-launched foundation he named #startsmall LLC. At the time of his announcement, Square was trading at $50, hence the "$1 billion donation" (20 million shares * $50 = $1 billion).
With his announcement, Jack posted a link to a Google doc where he tracks every single donation #startsmall makes, which is actually really cool. You can check it out yourself to see the foundation's current value and each donation it has made since launching.
Note how the number in cell B3 is $3.5 billion. Thanks to the incredible rise of Square's stock price in the year since launching the foundation, Jack's original $1 billion donation has more than tripled. And that's after the foundation has already given away $350 million. According to cell B1, Jack's $1 billion donation has created $3.872 billion in value to date. In other words, Jack's charitable foundation is worth three times his Twitter stake.
Pretty amazing! So, what's your side project that’s going to make you ten times richer than your day job?
