Twitter stock in party mood as Jack Dorsey to stand down from CEO role

Jack Dorsey announced on Sunday that he would be leaving as Twitter’s chief executive, announcing his departure two years ahead of the company’s financial annual review. The announcement comes at a time when the…

Twitter stock in party mood as Jack Dorsey to stand down from CEO role

Jack Dorsey announced on Sunday that he would be leaving as Twitter’s chief executive, announcing his departure two years ahead of the company’s financial annual review. The announcement comes at a time when the social network has been testing ways to improve the platform’s power users.

But some analysts speculated that Dorsey’s decision to step down signals discontent with how the social media giant is performing. His departure was first reported by BuzzFeed News.

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“Personally, 2018 feels like an important year for us and for the industry,” Dorsey said in an announcement. “From our evolving product roadmap, to our work to build trust and protect our community, to the launch of our new mission and next chapter, the next steps for Twitter will be defining our role in the future of public discourse.”

Dorsey has served as the interim CEO since 2008 and became permanent CEO in 2010. The company’s release did not specify a successor for Dorsey, but Twitter did share a handful of board members who will help CEO-in-waiting Adam Bain oversee the day-to-day operations. Dorsey will remain on the board and will also remain as the company’s executive chairman.

“As [Twitter] transitions into its next chapter, I’m confident Adam will do an incredible job,” Dorsey said. “Adam has done an incredible job executing our strategic priorities, building out the leadership team and creating a world-class operations and finance team. I’m excited for him to take the reins and lead Twitter on a new journey forward.”

At the same time, the company seemed to confirm speculations of a shift in power in the executive suite, announcing that Bain was now CEO of global revenue.

“Leading Twitter in these next six months will help Adam get ready to be the next permanent CEO,” said Dorsey. “One of the most important attributes of a great leader is to allow others to shine. I believe Adam will be amazing in this role.”

The decision also looks to be prompted by Twitter’s growing pains, as over the past year it has experimented with algorithmic news feeds, more algorithmic filtering and has started excluding big influencers – including British political journalist Robert Peston – from the Twitter main timeline.

Dorsey’s departure is not entirely unexpected, considering there have been at least three other instances where he stepped down from major positions at companies for very brief stints. In 2008, while he was still at Twitter, he briefly stepped away from the chief executive role at Square, the payments company he had started, before returning to the helm. In 2015, he left as Twitter’s COO before returning to the company as interim CEO.

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“The CEO seat at Twitter really is a crazy awesome job,” Dorsey said in 2013. “It is the hardest and coolest position in technology. It’s way harder to keep it together than it was when we had 10,000 users.”

Twitter has not been doing particularly well, with losses of $286m last year and user growth slowing for the first time since it went public in 2013. The company reported quarterly revenue up 41% year-on-year, to $731m and its user base up 13% year-on-year, to 321 million monthly active users.

But investors were not troubled. Twitter shares were up 2.4% on Monday, while the stock market as a whole was up over 2%. Analysts said Dorsey’s successor should be able to turn Twitter around.

“Twitter’s core business continues to struggle with usage and monetization trends despite positive operational and growth results,” said Brian Wieser, an analyst at Pivotal Research Group. “We believe the next CEO needs to figure out how to invest in accelerating user growth and engagement, continuing to monetize Twitter on a more broad basis and potentially monetizing Periscope.”

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