Last Friday, Bloomberg reported that activist investor Paul Singer was seeking to replace Jack Dorsey with a new CEO of Twitter. Singer’s Elliott Management Corp. had recently taken a sizable stake in Twitter Inc. and to push for changes at the social media company. The New York-based hedge fund has already nominated four directors to Twitter’s board, according to reports from people familiar with the matter. It is not clear who Singer would like to replace Dorsey.
Only three seats are opening up at this year’s annual meeting. Still, Singer wanted to ensure that they nominated enough directors to fill all three positions or any other vacancies that may arise, the report says. The exact size of Elliott Management Corp’s stake is unknown.
Representatives for Elliott and Twitter declined to comment on the online reports.
The report mentions part of the reason Singer is pushing for Dorsey’s departure is over concerns his attention is split between running both tech giants Twitter and Square. Dorsey is the only CEO of two public companies with market valuations exceeding $5 billion. Concerns were raised about Dorsey’s desire to work abroad from the continent of Africa. The CEO has said he plans to work up to six months a year in the region.
Dorsey is a long-time proponent of cryptocurrency. Square’s Cash App was lauded as an easy to use onramp into the BTC community. Square has also invested in Square Crypto, a team funded by Square, tasked with improving the overall ecosystem.
Paul Singer isn’t the only investor to express concerns about Jack Dorsey and Twitter’s governance. The company has been a target for activist investors for years. Its management is frequently criticized by the U.S. President Donald Trump, an avid user of the platform.
Twitter only has one class of stock, giving shareholders equal voting rights and making Dorsey vulnerable to challenges. This means co-founder Dorsey doesn’t have voting control of the company like his tech giant peer Mark Zuckerberg of Facebook Inc.; he owns only about 2% of the company. Since Dorsey returned as CEO in 2015, Twitter’s shares have fallen 6.2%, while Facebook’s have grown more than 121% during that period. Twitter turned its first annual profit in 2018, but it still suffered from a declining user base.
The report comes at a pivotal time with the U.S. election and the spread of the coronavirus dominating the Twittersphere. Many complain that Twitter has fallen behind on innovation, choosing to focus on its existing core service while other social media competitors like Snap Inc. and Instagram develop new features that have since grown in popularity with their users.
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