06/11/2015 07:25 pm ET Updated Jun 12, 2015

Outgoing Twitter CEO Dick Costolo's Shares Surge As Investors Cheer

Michael Kovac via Getty Images

Twitter CEO Dick Costolo stepped down Wednesday, six weeks after the company reported poor earnings that drove its shares down almost 25 percent. Twitter co-founder Jack Dorsey will replace Costolo and serve as interim chief executive, effective July 1, the company said.

Twitter said in a Securities and Exchange Commission filing on Wednesday that Costolo will be stripped of all unvested stock awards when he departs. That means Costolo stands to lose just under $16 million in unvested stock awards and $6 million in forfeited options, according to company filings.

Costolo's departure was greeted with glee by investors. Twitter shares surged as much as 13 percent in after-hours trading before settling about 4 percent higher than Thursday's closing price. Perversely, Costolo's own departure increased the value of his 8 million Twitter shares by roughly $10.3 million.

The day's events ended up costing Costolo $12 million net. Twitter said he'll receive no severence pay.