When any hotly followed, widely known private company goes public, there's usually a big buzz among the ranks of individual investors – the kind of people who are saving money for their kids' college educations, their own retirement or maybe that beach house they've always dreamed of. It's no secret, though, that the people who profit the most from initial public offerings are most often the big-time, behind-the-scenes investors the general public rarely hears about.
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Twitter's IPO is no different. Here's a short list of some of the investors poised to score big, at least on paper, off the social networking site's coming out party:
1. Evan Williams. The cofounder and early Twitter CEO owns more than 56 million shares in the company, making him the biggest single shareholder. Based on Twitter’s IPO price of $26, Williams' stake is worth more than $1.4 billion, and as the stock price soars Williams’ net worth will too. In addition to founding Twitter, Williams also founded Blogger, a site he later sold to Google.
2. Jack Dorsey. The Twitter chairman owns more than 23 million shares, making his stake in the company worth more than $598 million. Not bad work for a 36 year old. Dorsey is also associated with Square, a very successful cellphone app which lets you make and receive payments on your phone.
3. Dick Costolo. Twitter’s CEO owns more than seven million shares in the social networking site. At $26 per share, his stake is worth around $182 million. Not a bad haul for a former stand-up comedian.
4. Adam Bain. Twitter's president of global revenue. The 40-year-old's 1.7 million shares are worth more than $44 million at the $26 IPO price, or close to $8 million based on the afternoon trading price near $47. Bain was a former employee of Rupert Murdoch's NewsCorp.
5. Peter Currie. The Twitter director is a veteran of 1990s browser-war casualty Netscape as well as Facebook. His 300,000 shares are worth $7.8 million at the IPO price.
While Twitter’s founders and top executives are not cashing out their shares, some venture capital investors also struck it big with the company’s IPO. That list includes Suhail Rizvi, the secretive founder of New York-based private equity firm Rizvi Traverse, which owned 17.9 percent of Twitter in its funds before the IPO, and Benchmark Capital, which owned nearly 7 percent of the company.
For individual investors mesmerized by the eye-popping examples listed above, it’s worth remembering: Snapping up the stock today may (or may not) leads to gains in the long run, but highly hyped IPOs like this one generate wealth for the already wealthy. It still takes money to make money.
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