Jack Dorsey buys $9.5 million in Twitter stock while continuing to sell Square

Jack Dorsey buys $9.5 million in Twitter stock while continuing to sell Square
Twitter Chief Executive Jack Dorsey owned nearly 15.5 million Twitter shares before purchasing more than a half million more shares Friday.

After bounce from earnings beat, Twitter gets a late-trading boost from chief executive’s second large stock purchase of year

Twitter Inc. stock jumped about 1% in late trading Friday after Chief Executive and co-founder Jack Dorsey tweeted that he had purchased more than 500,000 shares of the company.

Dorsey’s tweet was a reply to one he sent in February, when the Twitter TWTR, +1.20%  CEO posted a link to an SEC filing that showed he had purchased more than 400,000 shares, spending about $7 million. An SEC filing Friday afternoon showed that Dorsey paid $16.62 a share for the latest shares, for a total purchase price of slightly more than $9.5 million.
Dorsey can afford it, as he has been selling vested shares in Square Inc. SQ, +1.88%  , the other San Francisco company he co-founded and leads as CEO. Dorsey made his February purchase after the planned sale of about $11 million in Square stock.

Since then, Dorsey’s planned Square sales have continued at two-week intervals, according to Securities and Exchange Commission filings that show five separate sales of batches of 381,500 shares apiece since his last Twitter stock purchase. Based on the average weighted share prices reported in the documents, Dorsey has sold more than $31 million worth of Square stock in that time.

Dorsey didn’t receive the best deal possible on Twitter shares at $16.62, as that price was reached thanks to a combined 13.3% gain on Wednesday and Thursday after the social-networking company showed off long awaited user growth in an earnings report Wednesday morning. That run seemed to end Friday, as shares dropped 0.8% to close at $16.48 while the Dow Jones Industrial Average DJIA, -0.11%  and S&P 500 index SPX, -0.15%  both declined to end an otherwise strong week.

While many were relieved to see Twitter finally increase the number of people on its platform in the first quarter of 2017, as prolific tweeter Donald Trump ascended to the presidency, analysts were concerned that Twitter revenue may not follow suit.

After Friday’s purchase, Dorsey owns more than 16 million shares in Twitter. That’s still less than he had after the company went public in 2013, when Dorsey held more than 22 million shares, thanks to a large sale of about 6.8 million shares in 2016.

Even after a raft of price target increases for Twitter following Wednesday’s earnings report, the average price target among analysts tracked by FactSet is $15.04, implying downside of more than 8% from Friday’s closing price. Only four of the 36 analysts covering Twitter rate the stock a buy, according to FactSet, with the majority labeling the stock the equivalent of hold.

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