An Activist Investor Is Trying to Oust Twitter CEO Jack Dorsey
Elliott Management has acquired a large stake in Twitter and wants to replace co-founder and CEO Jack Dorsey with a hand-picked leader, according to Bloomberg.
It doesn't appear Dorsey can fight an activist investor without assistance; therefore, Twitter can only stop Elliott Management if shareholders vote against the hedge fund's proposals. Bloomberg reports that Elliott Management wants to fill three open seats on the board of directors and any other vacancies. From there, Elliott Management would instruct its directors to replace Dorsey.
Elliott Management sees Dorsey's leadership as problematic. He also serves as Square's CEO, and has expressed interest in relocating to Africa for six months out of the year.
Elliott Management is led by billionaire Paul Singer, who donates to the Republican Party and related causes.
Twitter celebrates its 13th birthday in late March, but the stock price suggests it's struggling to generate long-term growth like its competitors. Facebook trades just below $192 and continues setting records every quarter while Twitter's revenue often fluctuates, positioning its stock price no higher than $40.
Plenty of value exists in Twitter, though. It acts as a digital town square, and revenue spikes around major events like the upcoming 2020 United States presidential election. By replacing Dorsey, investors hope to discover the unrealized potential that can propel Twitter into a consistent cash cow.