Twitter shares rose yesterday after Bloomberg reported that an activist investor has built a sizable stake in the social media company and is pushing for changes, including possibly replacing co-founder and chief executive Jack Dorsey.
The shares climbed over 7% at one stage after posting only a gain of 3.6% this year before news of the activist interest emerged.
When Twitter executives met their activist investor agitators from Elliott Management for the first time last week, the man with the most to lose was absent.
Mr Dorsey didn’t attend the Friday summit in San Francisco where his future was the main topic of conversation, according to sources.
Instead, Twitter’s representatives included chairman Omid Kordestani and its lead director Patrick Pichette, said the sources.
In Elliott’s corner was the New York-based hedge fund’s head of US activism, Jesse Cohn, and portfolio manager Marc Steinberg.
Chief among Elliott’s concerns: The need for Twitter to have a full-time chief executive, rather than one who splits his time, as Mr Dorsey does, between the social media company and mobile-payments platform Square.
In a year where major news events are colliding — from the spread of the coronavirus to the US election and the Summer Olympics — Elliott thinks Twitter needs the undivided attention of a CEO to oversee the role it plays in disseminating information, especially when new users and advertisers are flocking to the platform.
The meeting — the first face-to-face talks between San Francisco-based Twitter’s board and the activist since Elliott raised its concerns — was productive and expected to lead to further conversations, they said.
The hedge fund, which was founded by billionaire Paul Singer in 1977 and manages about $40bn (€36.2bn) of assets, has taken a significant stake of more $1bn in Twitter and nominated four directors, including Mr Cohn, sources said.
Twitter has a staggered board, which means only three of its directors will stand for election at the 2020 annual meeting, which is yet to be scheduled but took place in May last year.
Elliott has nominated an extra director in case there are additional vacancies, the sources said.
Mr Dorsey has a seat on the board.
Elliott is concerned that Mr Dorsey’s other interests — he’s also floated the idea of spending as much as six months this year working in Africa — have taken his attention off Twitter.