
Jack Dorsey gives 1% Twitter stock to employee equity pool - runesoerensen
https://twitter.com/jack/status/657351519461707776
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Dwolb
This is a little weird. Jack Dorsey is not a majority owner of Twitter and so
he can't do whatever the heck he wants. Most companies would ask the board for
approval to issue more shares for its employees - this did not happen. So then
the question is, 'why does Jack feel compelled to donate his shares more than
any other Twitter shareholder?'

One reason could be Jack is a philanthropist and believes in giving back to
people who may have contributed to his success.

Another could be Jack expects a return in investment. But how much? Twitter
market cap is ~19B. He is giving 1% of Twitter to employees which is 190M. He
owns 3% therefore he was worth 570M. To make his money back, Twitter must rise
from 19B to 25B. Can 190M invested in its current developers achieve this?

Probably not. Jack is most likely trying to save Twitter. The third option is
Twitter is in big trouble and only Jack can see it. This could be a last ditch
effort to make short term investments to save the company by investing in the
people that matter most. It's a bold move that could pan out in their favor.

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onion2k
One thing that's worth adding - Twitter _as a corporation_ might be in
trouble, but Twitter _as a product_ is not. If the corporation fails then the
product would be bought by Facebook/Google/Apple/etc and carry on for a very
long time yet.

Twitter might be hard (impossible?) to successfully monetize to the point
where it's actually profitable, but as a platform it still has a huge amount
of value that lots of people would like to own. Platforms with millions of
users never fail quickly.

~~~
afro88
> Platforms with millions of users never fail quickly.

Yes they do. When a better product arrives that gains enough traction, users
migrate very quickly. Myspace, Altavista, Aol etc.

~~~
onion2k
Not really. Only AltaVista is dead.

MySpace: Still going at [https://myspace.com/](https://myspace.com/)

Altavista:
[https://en.wikipedia.org/wiki/AltaVista](https://en.wikipedia.org/wiki/AltaVista)
\- shut down in 2013, 10 years after it was sold to Yahoo!.

AOL: Very much still alive at [http://www.aol.com](http://www.aol.com), owns
sites like Huffington Post.

And in response to mattmanser, ICQ: Still going at
[https://icq.com/](https://icq.com/)

They may not be the behemoths of the tech industry any more but they are
definitely not dead. And the only one that is dead took a decade before it was
shut down.

Sites with millions of users never die quickly.

~~~
adventured
Your position of never is not correct.

Formspring failed extremely fast.

[http://techcrunch.com/2013/03/15/formspring-the-
pioneering-a...](http://techcrunch.com/2013/03/15/formspring-the-pioneering-
anonymous-qa-platform-is-shutting-down/)

It was one of the fastest growing services in Web history, and unraveled just
as fast.

The existing service was completely shut down. The homepage is now some kind
of funnel for another service.

And an example that wasn't market based: Megaupload. 180 million users, killed
overnight.

~~~
rickyc091
I've actually never heard of formspring. I guess the differentiator between
formspring and twitter is that twitter is more mainstream. It's popular with
celebrities, kids, etc. Formspring seems like a very specific niche market.

Megaupload was killed due to piracy issues. A bit different.

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genmon
One important datapoint is that Jack Dorsey did something very similar at
Square in December 2013: [http://fortune.com/2013/12/20/squares-dorsey-
returns-10-of-h...](http://fortune.com/2013/12/20/squares-dorsey-
returns-10-of-his-shares/)

Judging by how strong the Square team is, and how much he's respected there, I
imagine this move is now part of his playbook to build a great organisation.
It's courageous.

From the link above:

> Jack Dorsey, the founder and CEO of Square, has voluntarily given 10% of his
> shares in the company back to Square. The highly unusual move will expand
> significantly the pool of shares available for employee compensation and
> acquisitions while minimizing dilution for shareholders.

> Dorsey owns approximately 30% of Square and is giving back about 3% of the
> company’s total equity. The shares Dorsey is returning are worth between
> $97.5 million and $150 million based on estimates of the company’s
> valuation.

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bentlegen
NYT headline: "Jack Dorsey Gives One-Third of Twitter Stake to Employees"

Article body: "Although no employee is being given additional stock directly"
...

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onedev
How is it being distributed then?

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hkmurakami
It likely went to the stock pool that's been marked as "for employees"

~~~
spacecowboy_lon
Or to the USA analog of an employee benefit trust.

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hackaflocka
To thrive more, Twitter needs to be made simpler and more irresistible. It
doesn't need charity that amounts to a few drops in the ocean. I could be
wrong on this but I seem to remember that in one quarter alone sometime back,
Twitter created fresh stock in the amount of around $800 million to grant to
employees. $190 million is but a fraction of that.

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jimjag
Do the employees who got canned get to share in this pool? It would have been
a nice gesture, esp to the open source team.

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ksml
Duplicate:
[https://news.ycombinator.com/item?id=10436803](https://news.ycombinator.com/item?id=10436803)
I actually think this NY times link is better because it provides more info
and context, FWIW

Edit: Actually the NY times link was posted after this, so I guess it's a dupe
of this, not the other way around :)

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gsibble
This is simply a tax move. Dorsey is going to pay hundreds of millions in
capital gains taxes when Square goes public later this year. He gets to take
this as a loss which he can write off against those taxes. It's essentially
free. Great PR stunt but doesn't cost him a dime.

~~~
eis
Now if you could explain how $190 million in losses can save $190 million in
taxes, that would be great. Hint: it doesn't work this way.

~~~
gsibble
No, it doesn't. But $190 million in losses can be written off against $190
million in gains.

