Billionaire Paul Singer's Elliott Management Corp has purchased a stake in Twitter and is seeking to replace its CEO Jack Dorsey, Bloomberg reported. In a year in which major news events are colliding - the spread of the coronavirus, the US presidential election, the Summer Olympics - Elliott Management 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 people said.
Dorsey is known to split his time between serving as CEO of Twitter and CEO of Square, a fintech and payments company he also founded.
Elliott has taken a roughly $1 billion stake and been in talks with Twitter administration about its need for the corporate to discover a full-time chief govt officer, the individual stated.
Twitter shares jumped $2.78, or 8%, to $35.99 in midday trading Monday.
He has said he would move to Africa for three-six months to "define the future".
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Dorsey, who dropped out of New York University in 1999, founded Twitter and sent the world's first tweet in 2006.
Therefore, Elliott reportedly claimed that Twitter is falling behind on innovations, unlike other social media platforms. Facebook and Snapchat have introduced new products and features that attract advertisers, while Twitter hasn't changed its product much beyond raising its character count.
Replacing Dorsey may be more hard than many assume because Twitter's board is stacked with Dorsey loyalists. Shares are down 6.2% since Dorsey's 2015 return and Twitter airballed Q3 earnings in October.
There has been no official confirmation of that either from Jack Dorsey or Elliott yet. Dorsey came back as CEO when Dick Costolo stepped down. Galloway said he never got a response, and has since sold all his shares.
Dorsey is the only CEO of two public companies with market valuations of more than United States dollars 5 billion, CNBC noted.