Twitter co-founders become instant billionaires

Twitter co-founders Evan Williams and Jack Dorsey became instant billionaires as trading began following the social media company’s hotly anticipated stock market debut yesterday.

Williams owns 59.6m shares, valued at more than $2.69bn. Dorsey holds another 23.4m shares, valued at over $1bn.

Despite having been created just 7 years ago, Twitter now has more than 200m users worldwide, a quarter of which are in the US, where the firm makes most of its advertising revenues.

But the biggest shareholder is Rizvi Traverse, a New York private equity firm which holds nearly $4bn worth of the stock. Its Saudi client Prince Alwaleed bin Talal will also share of the profits, having taken an early punt on Twitter.

Twitter’s market valuation by the end of trading on Thursday was 24 times its projected earnings of $1bn next year.

Tomas Freyman, director of valuations at BDO said that the same multiple applied to Apple would represent the entire annual economic output of Germany.

“This is a company with $600m of revenues and no profits,” Freyman added.

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