Report: Hedge Fund Wants Twitter CEO Out

Activist fund and hedge fund company Elliott Management Corp. is pressing for changes after acquiring a stake in Twitter, including replacing CEO and Co-Founder Jack Dorsey, Reuters reported Friday (Feb. 28), citing sources familiar with the matter.

Although a co-founder, Dorsey only owns roughly 2 percent of Twitter. Twitter gives shareholders equal voting rights, which could make Dorsey “vulnerable to a challenge” from Elliott, the reported stated.

Shares of Twitter took a dive last year when the company’s platform faltered in a way that prevented ad targeting and data sharing. Twitter has also stalled in relation to its competitors’ growth and acquisitions.

Founded by billionaire Paul Singer, Elliott wants to name its own nominees to Twitter’s eight-member board “when three of the company’s directors stand for election at its upcoming annual shareholder meeting,” the sources told Reuters.

According to the report, the name of a potential replacement for Dorsey wasn’t released by Elliott, nor did it release the size of its Twitter stake. Elliott’s hedge fund, based in New York, has in excess of $40 billion in assets under management. It has gone after firms like eBay, SoftBank and others.

Silicon Valley’s Dorsey, 43, also runs the mobile payments startup Square, which he co-founded in 2009 and took public in 2015. He is one of the few people to perform as the CEO of two public firms simultaneously, Bloomberg reported.

Twitter was a potential target for activist investors for years, according to reports. Analysts started questioning Dorsey’s management when the CEO said in November that he was considering a move to Africa for as long as six months.

Elliott’s press for change “comes at a pivotal time with the U.S. election, Summer Olympics and other major events, like the spread of the coronavirus, which tend to attract more users and advertisers to Twitter,” according to the report.

In January, Dorsey’s Square won a patent to debut new tech, allowing users with different assets to transfer payments, including crypto-to-fiat transactions.