One man, two very big hats.
As the social media and payments worlds (and much of the rest of the globe) know by now, Jack Dorsey has been appointed the permanent chief executive of Twitter. The move leaves Square, the other company Dorsey runs as CEO, in what The New York Times calls “a thorny situation.”
Dorsey takes the reins of Twitter while Square readies for an initial public offering that is widely rumored to be coming by the end of this year. Square, for its part, would not comment publicly on whether the company would indeed be moving forward to list shares.
The Times reports that the balancing act Dorsey must pull off astride both companies has raised concerns among several current and former Square employees, several of whom commented under cloak of anonymity to the paper. Some of those sources, said The Times, opined it seemed that Dorsey was “choosing his favorite child, over the second-born, Square.” Dorsey gave what amounted to a promise to Square employees at a meeting this past June, reported The Times, stating that he would remain CEO of that company until he was either “old or dead.” Yet an internal company discussion did not garner an unequivocal answer from Dorsey when pressed whether he would also be the permanent head of Twitter.
The dual nature of Dorsey’s professional life, and its split duties, may have an impact on Square if it does come public, with the risk of the company losing some investors at the outset. The Times reported that upon a public offering, Square may be in the position of having to accept a lower share price if it proves true, or if there is merely the perception, that Dorsey is unable to devote his time to maximizing shareholder value.
As had been widely reported, Square has raised more than $500 million in capital and has been valued at $6 billion by investors as of last year, even alongside what has been reported to be thin margins, as it continues to take a 2.75 percent cut of transactions off the top, but must pay fees to other financial middlemen.
Sources told The Times that Dorsey has been able to triage his time wisely, with a focus lately on Square Capital, a cash advance program, and also the company’s P2P program.
[bctt tweet=”Has Dorsey been able to triage his time wisely between Square and Twitter?”]
In an interview with The Times, an unnamed Square director said that “I’ve seen this before, once a team is superstrong and operating well, Jack moves on to the next thing. It’s not realistic for him to be around all the time on every single project.” Other insiders have also said that Square’s executive roster, peopled with former professionals from tech stalwarts such as Facebook, Amazon and Google, offer up a deep bench of support for Dorsey to lean on.