Elliott targets Twitter, searching for CEO Dorsey’s elimination: sources

(Reuters) – Hedge fund Elliott Administration Corp has amassed a stake in Twitter Inc (TWTR.N) and is pushing for adjustments, together with elimination of the social media firm’s chief govt, Jack Dorsey, two folks aware of the matter mentioned on Friday.

FILE PHOTO: Paul Singer, founder and president of Elliott Administration Company, speaks at WSJD Stay convention in Laguna Seaside, California, U.S., October 25, 2016. REUTERS/Mike Blake/File Picture

Twitter is without doubt one of the few U.S. know-how firms headed, however not managed, by one in every of its founders. It has given shareholders equal voting rights, making Dorsey, who owns solely about 2% of the corporate, susceptible to a problem from an activist investor equivalent to Elliott.

Twitter shares fell final 12 months when the corporate disclosed that its platform skilled glitches that hindered its capacity to focus on advertisements and share knowledge with companions. The San Francisco-based firm’s reluctance to increase past its core platform has additionally left it with restricted scale in comparison with its bigger social media friends.

Elliott, based by billionaire Paul Singer, can be searching for to put in its personal nominees to Twitter’s eight-member board when three of the corporate’s administrators stand for election at its upcoming annual shareholder assembly, the sources mentioned.

It’s not clear who Elliott would love Dorsey changed with and the way large its stake in Twitter is. The New York-based hedge fund has greater than $40 billion in belongings underneath administration, and has focused firms in latest months starting from eBay Inc (EBAY.O) to SoftBank Group Corp (9984.T).

The sources requested to not be recognized as a result of the matter is confidential. Elliott declined to remark. Twitter didn’t instantly reply to a request for remark. Bloomberg Information first reported on Friday on Elliott’s place in Twitter.

Dorsey, 43, is one in every of Silicon Valley’s most distinguished entrepreneurs, and in addition runs Sq. Inc (SQ.N), a cellular funds firm he co-founded.

Whereas traders have tolerated this association since 2015, when Dorsey grew to become Twitter’s CEO for the second time, his announcement in November that he want to transfer to Africa for as much as six months raised questions amongst analysts about his administration.

Dorsey, who helped conceive Twitter in 2006, first served as CEO till 2008, when he was changed by one in every of his co-founders Ev Williams. Williams had accused Dorsey of being a poor supervisor and never focusing sufficient on Twitter’s profitability.

Dorsey returned as interim CEO after his predecessor Dick Costolo stepped down. Dorsey’s data of the corporate and fast launch of latest merchandise satisfied Twitter’s board at hand him the reins on a everlasting foundation just a few months later.

Dorsey shouldn’t be the primary CEO to run two main firms. Steve Jobs led Apple Inc (AAPL.O) and animated film studio Pixar for a number of years, whereas Elon Musk runs electrical automotive pioneer Tesla Motors Inc (TSLA.O) and rocket maker SpaceX.

Reporting by Svea Herbst-Bayliss; Enhancing by Stephen Coates and Christian Schmollinger

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