Twitter rebounds after Jack Dorsey buys shares

August 11 00:53 2015

Twitter shares are rebounding from an all-time low after interim chief executive Jack Dorsey became the latest insider to buy shares. In a show of confidence in the future of the company he co-founded, Dorsey bought more than 31,000 shares of Twitter on Monday for about $875,000. Then he promoted the purchase in less than 140 characters. “Investing in Twitter’s future,” Dorsey wrote in a tweet. He included a link to the Securities and Exchange Commission filing disclosing his purchase.building-twitter-lists

The market responded. Twitter shares jumped 9% to close at $29.50 on Monday, even though this was a relatively minor purchase for Twitter’s fifth-largest shareholder. Dorsey has almost 22 million shares of Twitter  — and he has sold more than 379,000 shares since November. In another market-boosting move, Twitter announced Monday that it has sealed a two-year content and advertising deal with the National Football League. The deal that includes video highlights and photos from games as they are being played is broadly seen as a way for Twitter to tackle the challenge of stagnant user growth while generating more advertising revenue.

Dorsey is not the only insider buying shares. Twitter board member Peter Currie bought about 9,200 shares for about $250,000 in stock. Another Twitter board member Peter Fenton bought about $200,000 in stock on Friday. Twitter’s chief financial officer Anthony Noto also bought shares last week. Twitter co-founder Evan Williams, who is Twitter’s largest shareholder and sits on its board, sold 372,000 shares on Tuesday and Wednesday.

The purchases were designed to shore up support from investors whose confidence in the company has wavered. In remarks that sent the stock plunging, Dorsey and Noto told analysts it will take “considerable” time for Twitter to reignite growth and broaden the appeal of the service. User growth in the second quarter increased at the slowest rate since Twitter went public in November 2013.

Weighed down by concerns that Twitter will never match the popularity of Facebook and may even fall behind Facebook-owned photo-and-video-sharing service Instagram, Twitter shares have been flirting with the initial public offering price of $26. Twitter closed down 2% to $27.04 on Friday, the lowest price since the company went public in November 2013. Twitter is in the midst of a search for a new CEO. Dick Costolo ste