Many people assume that Twitter was the reason for Jack Dorsey’s impressive fortune, but that actually isn’t the case. When Elon Musk acquired Twitter in October 2022 for $44 billion, Dorsey held a modest 2% ownership of the company’s outstanding equity, equivalent to approximately 18 million shares. Dorsey's pre-tax earnings from the Twitter sale amounted to $978 million.
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The true source of Dorsey's wealth lies in his involvement with Block Inc., a renowned payments company originally known as Square. As one of the co-founders, Dorsey's ownership of 43 million shares in Block has proven immensely lucrative. With the current share price standing at $64, Dorsey's stake is estimated to be valued at around $2.75 billion.
At present, Dorsey's net worth is $4.4 billion. Like many tech billionaires, he leverages his wealth to engage in ventures that many would deem "cool." While this type of investing is commonly used by tech billionaires, retail investors have also begun investing in startups through equity crowdfunding.
According to some business analysts and disgruntled Block shareholders, his acquisition of Tidal, Jay-Z's music streaming service, was nothing more than a "$300 million bar tab to hang out with Jay-Z."
On March 4, the world was taken aback when Block announced its agreement to acquire Tidal for $306 million. The news broke through a tweet from Dorsey that showcased a seemingly casual photo of him and Jay-Z enjoying each other’s company in a Hamptons, New York, mansion at the crack of dawn. The tweet expressed Dorsey's gratitude for Jay-Z's vision and leadership and stated his excitement about working together.
At 5:04 a.m., Dorsey tweeted, "I’m grateful for Jay's vision, wisdom and leadership. I knew TIDAL was something special as soon as I experienced it, and I'm inspired to work with him. He'll now help lead our entire company, including Seller and the Cash App, as soon as the deal closes.
The details of the deal were presumed to have been negotiated between Dorsey and Jay-Z over wine.
When Dorsey and Jay-Z are together, they may enjoy a glass of wine, Dorsey's preference, or the D’USSÉ cognac Jay-Z enjoys.
As it would later be alleged in a lawsuit brought by Block shareholders, the idea for Block's acquisition of Tidal came while Dorsey was "summering" with Jay-Z in the Hamptons. The claim was that out of the blue, Dorsey joined a Block board meeting via Zoom from the Hamptons and said he wanted to buy Tidal.
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Dorsey's proposal caught many off guard for several reasons. First, Block, primarily a payments company, had no prior involvement in the music streaming industry. It also came to light that Tidal was grappling with severe financial challenges, prompting Jay-Z to personally loan the struggling service $50 million to keep it afloat. Artists were abandoning the platform, and those who remained had no contractual obligation to stay.
Given Tidal’s dire circumstances, the value of the music streaming service appeared questionable at best, with some arguing that it was essentially worthless. Nevertheless, Dorsey and Jay-Z proceeded with the deal, purchasing 80% of Tidal for $306 million.
The recent legal battle ended in defeat for shareholders. The Delaware judge overseeing the case ruled against the shareholders, emphasizing that, from a technical standpoint, engaging in a poor business deal does not violate any laws. This verdict left Block and Dorsey in the clear, despite the deal being branded as "a $300 million bar tab to hang out with Jay-Z."
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