Jack Dorsey enters truce with Twitter board, keeps his role as CEO
Following some trouble from activist fund Elliott Management Corp, Twitter Co-founder and CEO Jack Dorsey finally has some relief as he retains his chief executive position.
Twitter and Elliott Management has entered a truce – with some terms and conditions. The trouble sparked because Dorsey is the CEO of Twitter Inc. and Square Inc., which are both publicly traded companies.
Elliott Management Corporation, New York-based hedge fund company and also one of the largest activist funds in the world, has a significant amount of stake in Twitter. After having picked up an undisclosed stake in the social media giant over the last few weeks, it has been attempting to remove Jack Dorsey from his role.
Having nominated four directors on to the board of Twitter, Elliott Management was planning to push for major changes at the social media company, media reports suggest.
After the truce, Twitter stated that it is soon going to raise $1 billion in funding from Menlo Park-based Silver Lake Partners. Along with some on-hand cash, Twitter also intends to facilitate a share repurchase programme for $2 billion, which will be carried out over time, which was part of the terms discussed.
Right ahead of the US presidential elections in 2008, Dorsey faced several challenges at Twitter like crashes in the company servers almost every hour that left his team in complete disarray. With the following lack of confidence in the CEO's leadership and unhappy board of advisors, he was fired from Twitter, which he had co-founded in 2006.
In July 2015, he returned to the company as its CEO. After his return, Twitter suffered a large drop in its shares – six percent – while Facebook had a growth rate of above 121 percent.
Owing to numerous other hiccups in the organisation, Dorsey has been facing the gun from the company board for a while now, with the latter trying to oust him.
(Edited by Saheli Sen Gupta)