Activist investment fund buys $1 billion Twitter shares to force CEO to step down

Elliott Management, a radical investment fund, now owns a large stake in Twitter. Elliott plans to push for changes at Twitter, including replacing CEO Jack Dorsey, the sources said. Bloomberg, citing sources, said Elliot had nominated four directors to Twitter’s board.

At Twitter’s annual general meeting this year, only three board seats need to be re-elected. Elliot hopes to nominate enough candidates for the board to win the three seats, as well as other seats. It is not clear how much the fund owns twitter.

Activist investment fund buys $1 billion Twitter shares to force CEO to step down

Elliot has been in private contact with Twitter to express his concerns, sources said. Since then, there has been a constructive dialogue between the two sides. Both companies declined to comment on the news.

Major events such as this year’s U.S. election, the Summer Olympics, and the new corona virus outbreak will all offer Twitter a good chance. These events tend to draw more users and advertisers to Twitter.

However, Twitter has been slow to innovate and has chosen to focus on core services. This is different from other companies in the social media industry, such as Snap and Instagram, which are developing photo filters and other forms of content to attract users.

Twitter has been a target for activist investors for years. The company does not have a tiered equity structure, so Dorsey does not have an absolute voting power over the company, as is Facebook CEO Mark Zuckerberg and others.

In addition, Dorsey is the only manager who serves as CEO of two large public companies at the same time. He is also in charge of square, a payment service. So whenever Twitter goes wrong, he can be the target of criticism. He has previously said he plans to increase the number of hours he spends in Africa to six months a year.

In addition to Elliott, others have questioned Dorsey and Twitter’s corporate governance. In an open letter to Twitter’s executive director, Scott Galloway, a professor at New York University’s Stern School of Business, expressed concern sly lying to investors in December. “Clearly, my primary goal is to replace CEO Dorsey. “

Dorsey’s shares have fallen 6.2 percent since he returned as Twitter’s CEO in July 2015. Over the same period, Facebook’s shareprice rose more than 121 percent.

Elliott has also pushed for change at other big companies before. This month, the company disclosed that it already held a large stake in SoftBank and plans to push for a bigger share buyback and governance reforms for the Vision Fund. In addition, Elliott has driven change slots at big companies such as AT?amp;T and eBay.