TWTR: Taking a look at Twitter and Square After Their CEO Pledges $1 Billion to Fight the Coronavirus

Jack Dorsey takes the bull by the horns
Square (SQ)- A very volatile stock
Twitter (TWTR) crawls higher

Jack Dorsey is the founder and CEO of two publicly traded companies that had put him in a challenging position over the past months. Some investors in Twitter (TWTR - Get Rating) and Square (SQ - Get Rating) felt that he was stretching himself far too thin by running two multi-billion companies at the same time. Meanwhile, he may have made his position even more of a challenge when he told the world he would be spending lots of time in Africa and planned to run the companies from the faraway continent.

No one would argue that Mr. Dorsey is anything but a competent CEO. However, like an athlete trying to play two professional sports, some of the investors in each company were concerned about the divided allegiance. The investors and Jack Dorsey worked out a deal where he would remain in the leadership position at both TWTR and SQ. Then Coronavirus hit markets with a tsunami of selling and uncertainty about the future.

Last week, Jack Dorsey reminded the world why he is special when he pulled off one of the greatest humanitarians and PR moves in history.

Jack Dorsey takes the bull by the horns

Many business leaders have generously pledged incredible sums to charities aiding in the battle against Coronavirus and its fallout. Jack Dorsey, the 43-year-old founder of TWTR and SQ, broke the mold when he gave almost one-third of his net worth to the cause last week. Dorsey wrote, “I am moving $1 billion of my Square equity (28% of my wealth) to #startsmall LLC to fund global COVID-19 relief. After we disarm this pandemic, the focus will shift to girl’s health and education, and UBI. It will operate transparently; all flows tracked here:

https://docs.google.com/spreadsheets/d/1-eGxq2mMoEGwgSpNVL5j2sa6ToojZUZ-Zun8h2oBAR4/edit#gid=0” (Source: Twitter)

While others have given, Mr. Dorsey’s gift stands as the most substantial compared to his net worth.

Square- A very volatile stock

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At $59.21 per share on April 9, SQ had a market cap of $25.441 billion. The stock trades an average of over 14 million shares each day. SQ and its subsidiaries provide payment and point-of-sale solutions in the United States and around the world. The company offers hardware and software solutions for a host of businesses. Source: Barchart

The chart shows that after trading to a peak of $101.15 per share in October 2018, SQ fell to a low of $32.33 in March at the height of the risk-off conditions caused by the global pandemic. The low was almost three times the opening price of the stock in 2015 at $11.20. SQ shares recovered by over 83% from the March low as of April 9.

Twitter crawls higher

TWTR had a market cap of $21.75 billion at $27.77 per share on April 8. The stock trades an average of over 22.3 million shares each day. As the social media platform embraced by people all over the world, including the President of the United States, TWTR’s brand stands alone. Source: Barchart

TWTR shares opened at $45.10 in 2013, hit a high of $74.73 that same year, but fell to a low of $13.72 in 2016. The most recent high came in September 2019 at $45.85, and the stock fell to a low of $20 in March before recovering by almost 39% to $27.77 at the end of last week.

Jack Dorsey made a statement last week with a gift that was a substantial percentage of his net worth. The public relations value in the move will likely benefit both SQ and TWTR as the leader and founder of the companies purchased significant goodwill.

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TWTR shares were trading at $28.15 per share on Tuesday morning, up $0.94 (+3.45%). Year-to-date, TWTR has declined -12.17%, versus a -11.73% rise in the benchmark S&P 500 index during the same period.

About the Author: Andrew Hecht

Andy spent nearly 35 years on Wall Street and is a sought-after commodity and futures trader, an options expert and analyst. In addition to working with StockNews, he is a top ranked author on Seeking Alpha. Learn more about Andy’s background, along with links to his most recent articles. More...