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Dumb investors try to buy Twitter shares, but instead invested in a bankrupt company

With social media giant Twitter gunning for a multi billion dollar IPO, several investors are going to get very rich.

twitter ipo rich

According to the company’s S-1 filing with the Securities and Exchange Commission, the largest individual shareholder is Evan Williams, the company’s former CEO. He has 12 percent of the company, or 56.9 million shares. He will become the only paper billionaire created by the IPO, with a paper net worth around $1.2 billion, if Twitter gets a valuation of just under $10 billion.

Other than that, here are some other investors and shareholders who will benefit from the public listing:

  • Benchmark (31,568,740 shares, or 6.7 per cent): Venture firm Benchmark started investing in Twitter in 2009 when it was valued in the $200 million-$250 million range. This stake includes shares owned by partner Peter Fenton, who led the firm’s investment in consumer-Internet play Yelp, holds a board seat at Twitter.
  • Jack Dorsey (23,411,350 shares, or 4.9 per cent): Dorsey co-founded Twitter and still serves as its chairman. In 2009, he founded payments service Square and serves as its CEO.
  • Dick Costolo (7,589,608 shares, or 1.6 per cent): A onetime improvisational comedian, Costolo took the helm of Twitter in 2010. He joined Twitter as COO the year before, after he and co-founders sold their web feed management provider FeedBurner to Google in 2007.
  • Adam Bain (1,722,350 shares, or less than 1 per cent): Bain is the president of global revenue at Twitter. He was formerly the president of audience network at News Corp’s Fox Interactive Media.
  • David Rosenblatt (283,333 shares, or less than 1 per cent): Rosenblatt is the CEO of luxury online retailer 1stdibs.com and is a member of Twitter’s board of directors.

Even though the company will instantly get a public value of up to $10 billion or more, none of the insiders can cash out right away.

Although insiders are unable to enjoy a gain straight away, shares of another company has been soaring thanks to ill-advised general public (or investors) who thinks that the company is Twitter.

tweeter stocks soar

According to Wikipedia, Tweeter was once a nationwide brand, with stores in several states. But in 2007, just as Twitter was launching as a company, Tweeter filed for bankruptcy and closed dozens of stores. Since then, its stock has been traded over the counter.

However, the company’s share price jumped as much as 1,800 percent Friday before settling in at the rise of 684 percent. The jump was not due to anything the company did, nor any announcement the company made, but rather, its was due to the fact that the penny stock’s ticker, TWTRQ, is very to that of Twitter, which filed to go public yesterday under the symbol TWTR.

TWTRQ is one letter away from TWTR, presumably confusing enough for very dumb or elderly stock market investors whom tried to buy Twitter shares.

As a reminder, the chart above is not the share price’s chart for Twitter. Twitter, has not gone public yet, and don’t be one of those dumb investors.

Dumb investors try to buy Twitter shares, but instead invested in a bankrupt company – Click To Tweet

Read also: Twitter acquires mobile ad technology firm MoPub, signs of impending IPO

 

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