Twitter might lose co-founder and CEO Jack Dorsey as Elliott Management tries taking operational control of the social network. It acquired a large stake in the publicly-traded company and wants to replace Dorsey with a hand-picked leader, according to Bloomberg.
It doesn't appear that Dorsey can fight any activist investor without assistance; therefore, Twitter can only stop Elliott Management if shareholders gather and vote against the hedge fund's proposals. Bloomberg reports that Elliott Management would like 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 serves as Square's CEO, too. In the past, Dorsey also expressed interest in relocating to Africa full-time rather than splitting time between there and North America. Investors don't understand Dorsey's level of commitment, which has led to several activist investors targeting Twitter in an effort to remove and replace him. Now, Elliott Management could pull the trigger and get Dorsey to lose his position atop the social network. Discussions are ongoing to see if Elliott Management's strategy will go through.
Some users expressed concern that Elliott Management, led by billionaire Paul Singer, will transition to a platform disseminating misinformation. Singer is a huge donor for 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.
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