The markets were doing pretty well on Monday. Following Friday’s losses, many had expected this week to start off on a sour note. However, it seems investors are moving on from the new variant news, and things seem to be more or less back to normal. What we did see on Monday, however, was one of the largest social media stocks on the Nasdaq got halted. Twitter (NASDAQ: TWTR) CEO Jack Dorsey announced he would be resigning from the company he founded.
According to his agreement, Dorsey will remain on the board until his term expires in 2022. In turn, Dorsey will be replaced by Twitter’s chief technology officer, Parag Agrawal. Agrawal has been serving in his position since 2017. When Dorsey was asked why he was leaving, he simply said he felt it was time for Twitter to have another CEO that didn’t happen to be its founder.
Dorsey, who is 45 years old, has been working as both the CEO of Twitter and Square, his digital payments company, at the same time for years now. For a long time, however, Twitter shareholders have been unsatisfied with the founder juggling his other commitments with the social media company. However, no one outside of Twitter expected Dorsey to officially and unexpectedly announce his resignation.
Dorsey has been kicked out of his position in the past. After founding Twitter in 2006, Jack was kicked out back in 2008 thanks to activist investors led by Elliot Management. Years later, he would return to the CEO position in 2015, which he has managed to hold onto despite more recent activist investors’ attempts on his position.
“Twitter is now executing against an ambitious multi-year plan to dramatically increase the company’s reach and value, and we look forward to the next chapter of Twitter’s story,” said Elliot Management in a statement following the news. “Having gotten to know both incoming Chairman Bret Taylor and incoming CEO Parag Agrawal, we are confident that they are the right leaders for Twitter at this pivotal moment for the company.”
Since Dorsey took over back in 2015, Twitter’s stock has shot up by more than 85%. In contrast, Square’s stock shot up more than 1,566% since it went public back in the same year. Despite the positive results, the board of directors is hoping to push Twitter’s growth into overdrive for 2022. Most analysts remain optimistic about Twitter’s prospects, especially since the company hasn’t had the same degree of negative regulatory scrutiny as other big tech and social media companies, mainly Google and Facebook.
Following the news, shares were down around 3.5%. However, regulators ended up halting the stock halfway through Monday due to how many traders were trading TWTR.
Twitter Company Profile
Twitter is an open distribution platform for and a conversational platform around short-form text (a maximum of 140 characters), image, and video content. Its users can create different social networks based on their interests, thereby creating an interest graph. Many prominent celebrities and public figures have Twitter accounts. Twitter generates revenue from advertising (90%) and licensing the user data that it compiles (10%). – Warrior Trading News