The microblogging platform, Twitter might have acquired a new stakeholder who is reportedly already shaking things up. Head and co-founder, Jack Dorsey is apparently not the right fit to Elliott Management, Twitter’s new stakeholder.
The new member is a $40 billion hedge fund, which is a major activist investor (the kind of investor that acquires a stake in a company in order to influence its direction in business). The company led by billionaire Paul Singer is now not keen on Dorsey serving as CEO.
With a 4% stake in the firm for a cost of roughly $1 billion, Elliot is aiming to shake things up by placing new board members at the company. Three positions will become available this year and Elliot has already nominated four directors.
The success of all these efforts will, however, mostly be evident until Twitter’s annual shareholder meeting in May.
The 43-year old entrepreneur was Twitter’s first CEO in 2008, returning to the role later in 2015. He has been a huge part of the growth of its user base over the past four or so years.
This was then followed by a dip of the company’s stock by more than 20% last October after a poor Q3 in 2019. The lapse was blamed on bugs in its ad targeting systems.
Other than Twitter, Jack Dorsey also heads payments firm Square and has been an open advocate to a cryptocurrency startup called CoinList. He owns 2% of Twitter and with that control now being lower than Elliott’s, it is quite possible for him to be ousted from his CEO post. This is if the board gets sufficiently influenced by Elliott.