Elliott Management Corp. may have thought that acquiring 4% of Twitter would give it enough of a voice to seek the ouster of the social media platform CEO, Jack Dorsey. However, the cryptocurrency fan subscribes to the “keep your friends close and your enemies closer” theory and has struck a deal with Elliott that will ensure he stays at the top. In return, he’s going to have to be willing to make a few changes.
According to a press release, Twitter, Elliott and technology investment firm Silver Lake have been busy striking deals this week. Silver Lake has agreed to make an investment worth $1 billion in Twitter, which will be used, in conjunction with the platform’s own funds, to repurchase $2 billion in shares held by Elliott. That repurchase is expected to be conducted over time, not in one single transaction.
In return, Elliott partner Jesse Cohn and Silver Lake co-CEO and managing partner Egon Durban will be given seats on Twitter’s board of directors. An additional, independent director will also be added at some point, and will come from a pool of candidates who “reflect the diversity of the Twitter service and also possess deep technology and AI expertise.”
Dorsey, who is also behind the payment services company Square, said in the announcement, “Twitter serves the public conversation, and our purpose has never been more important. Silver Lake’s investment in Twitter is a strong vote of confidence in our work and our path forward. They are one of the most respected voices in technology and finance and we are fortunate to have them as our new partner and as a member of our Board. We welcome the support of Egon and Jesse, and look forward to their positive contributions as we continue to build a service that delivers for customers, and drives value for stakeholders.”
The upcoming changes to the platform will reportedly not be derived from input from either Silver Lake or Elliott. Durban and Cohn are committed to maintaining a hands-off approach to Twitter’s policies and are expected to show “impartiality” toward Twitter’s rules and enforcement.
Cohn adds, “Twitter is one of the most important platforms in the global dialogue, and one of the most innovative and unique technology companies in the world. We are pleased to have worked collaboratively with Twitter on this constructive engagement. We invested in Twitter because we see a significant opportunity for value creation at the Company. I am looking forward to working with Jack and the Board to help contribute to realizing Twitter’s full potential.”
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