Steve Ballmer Takes Big Stake in Twitter

Social Media Dow Jones Newswires

Microsoft Corp.'s (MSFT) former chief executive, Steve Ballmer, said on Friday that he owns 4% of Twitter Inc (TWTR)., a surprise revelation that makes him one of the social media company's top investors.

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Mr. Ballmer, now the owner of the Los Angeles Clippers basketball team, tweeted on Friday that he accumulated the stake in the past few months. He confirmed his Twitter investment to The Wall Street Journal. It isn't clear whether he bought the shares after Dick Costolo stepped down as CEO in July.

In the tweet, he called Twitter "leaner" and "more focused" with the recent appointment of CEO Jack Dorsey and the release of a news-curation product called Moments.

Twitter's shares recently rose 3.1% to $30.64 on the New York Stock Exchange. At that price, Mr. Ballmer's stake is worth more than $800 million.

Mr. Ballmer's stake would make him the third largest individual owner of Twitter stock -- behind co-founder Ev Williams, who held about 6.9% as of August, according to a regulatory filing, and Saudi Prince al-Waleed bin Talal, who, along with his investment firm Kingdom Holding, owns more than 5% as of October. Mr. Dorsey holds about a 3% stake in Twitter.

The largest institutional investor, according to filings as of June, is Fidelity Management with a 4.3% stake.

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A Twitter spokesman declined to comment

Twitter appears to be a departure from Mr. Ballmer's investment strategy. For instance, at last year's WSJD conference, on the subject of whether he sees an opportunity to make money as a tech investor, Mr. Ballmer said: "My big bet in tech is on Microsoft." He added, "I'm a guy who thinks businesses are supposed to make money. Profit does matter. Eyeballs and monthly active users...unless it leads to profit...I can't get that supercharged."

Twitter generated $502.4 million in revenue in the second quarter, but remains unprofitable. The company has also struggled to grow its user base as quickly as investors expected--during the quarter ended June 30, its monthly active users rose 2.6% to 316 million.

Also on Friday, Twitter disclosed the pay package of its newly appointed executive chairman and former Google executive Omid Kordestani. Twitter will pay him a base salary of $50,000 and granted him the option to buy 800,000 shares of Twitter stock. Mr. Kordestani will also be eligible for a one-time stock award in the form of performance-based restricted stock units covering 400,000 shares.