“Activist” Investor Elliott Management has bought more than $1 billion of Twitter stock and is now going after Twitter CEO Jack Dorsey to leave the company.
Dorsey, the CEO of two publicly traded companies, Twitter and Square, is a big target since he splits his time between the two companies.
Peter Kafka writes in his think piece in Recode:
[Elliott Management] wants Dorsey to stop running Twitter — or, at the very least, stop running both companies at the same time. And unlike other people who complain about Twitter, these guys might actually be able to do something about it.
Here’s the deal: Elliott Management, an “activist investor” firm, has bought a lot of Twitter shares and wants to replace Twitter CEO Jack Dorsey. It thinks pushing out Dorsey will make Wall Street value Twitter more favorably, which would make the value of Elliott’s Twitter shares rise.
Elliott has acquired about $1 billion worth of Twitter shares, which means it has a sizable stake in Twitter, but nothing close to control of the company. Now, the firm wants to use that stake to replace four Twitter board members with its own nominees, who would then presumably pressure Dorsey to leave — or at least stop running Square, the payments company he founded after he first left Twitter.
Elliott Management has said they think Twitter’s shares should be worth more than they are today. They seem to place blame in many facets of the company, but ultimately the buck stops with Dorsey.
What concerns me is that the head of Elliott Management, billionaire Paul Singer, is a major Republican donor. With this comes theories that the firm wants to change the landscape of Twitter to make it more conservative friendly. Though Kafka writes in his piece that this isn’t the case:
Highly recommended reading: This 2018 New Yorker profile of Singer and Elliott, which should help shoot down facile theories — which you can find on Twitter — about Singer, a prominent Republican donor, going after Twitter for political reasons. Singer and his team are motivated by money above all else. They also don’t want to “buy Twitter.” They want the value of the Twitter shares they bought to increase.
It seems as though this investment from Elliott Management is clearly business related and not politically motivated. As Kafka writes:
Elliott doesn’t seem focused so much on ousting an eccentric CEO but, more generally, on boosting Twitter’s stock price.
So we as a user base of this technology need to remember, we are only renting space on these platforms. We don’t own our profiles or what we post. We are at the mercy of the markets, especially when the company we’re investing our time in is publicly traded.
I always suggest to not put all your “eggs in one basket.” Setup a blog, post there first then share on Twitter and the other social networks.
What do you think of this investment by Elliott Management in Twitter? Is Jack Dorsey a dead duck?