Twitter's CEO Jack Dorsey gets "ultimatum'd" by a hedge fund — might lose CEO-ship
Snacks / Tuesday, March 03, 2020
Not getting vipassana meditation vibes... — Elliott Management. The huge hedge fund has bought up over $1B worth of Twitter stock and is putting that power right to work — first by reportedly nominating 4 new directors to Twitter's board. But Elliott also reportedly wants to remove/replace Twitter's CEO/co-founder Jack Dorsey. They think Twitter's better off with a new CEO because...
- He's (too) quirky: Silicon Valley founders are known for their visionary-ish eccentricity. Dorsey takes it to another level: 10-day silent vipassana meditations in Myanmar, a planned 6-month trip to Africa this year, eating 1 meal a day, walking 5 miles to work each day. Objectively cool, but investors are concerned.
- He's got a (huge) 2nd hustle... Dorsey's also the CEO/co-founder of Square, the digital payments company valued at $35B (more than Twitter's $27B). This double CEO-ship of 2 big public companies is unusual. Elliott wants a CEO for Twitter focused on Twitter.
Annnd, Jack might have a favorite child... Dorsey owns $531M worth of Twitter stock, but a re-tweetable $4.9B of Square stock. Twitter's stock is barely higher now than it was in 2013 when it IPO'd — meanwhile, Square is thriving.
The multi-tasking eccentric CEO thing only flies in certain scenarios... Here are the 2:
- If the company is thriving or its stock is up (like with Musk's Tesla), investors may tolerate extracurriculars. But Twitter's earnings growth and share price have lagged.
- When a founder is given super-voting stock (like Facebook's Zuck) his/her power is protected against investor pressure. Jack Dorsey has neither — and could get sacked from the company he founded.
Latest Stories
Sherwood Media, LLC and Chartr Limited produce fresh and unique perspectives on topical financial news and are fully owned subsidiaries of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate, including Robinhood Markets, Inc., Robinhood Financial LLC, Robinhood Securities, LLC, Robinhood Crypto, LLC, Robinhood Money, LLC, Robinhood U.K. Ltd, Robinhood Derivatives, LLC, Robinhood Gold, LLC, Robinhood Asset Management, LLC, Robinhood Credit, Inc., Robinhood Ventures DE, LLC and, where applicable, its managed investment vehicles.