As the company confirmed on Monday afternoon, Twitter CEO Jack Dorsey is stepping down from his chief position with immediate effect. He will be inherited by the previous CTO Parag Agrawal. CNBC had previously reported on the upcoming resignation, citing insiders.
In a first reaction to the CNBC announcement, Twitter shares were already trading 10.79 percent higher at 52.15 US dollars in NYSE trading. In the further course of the trade, however, the paper was suspended following a company announcement. After the company was confirmed, the trading of the papers continued to be clearly positive until investors took profits. In the end, it was down 2.78 percent to $ 45.76.
Square shares are also on a roller coaster ride
Dorsey currently runs the mobile payment company Square. Most recently, the entrepreneur was confronted with criticism from hedge fund billionaire Paul Singer, who questioned whether Dorsey should run both companies. Square shares were initially in positive territory on the NYSE, until more profit-taking began – the shares were only 0.37 percent higher at $ 212.87.
Jack Dorsey’s time on Twitter and beginnings in Square
Dorsey was last at the top of Twitter since 2015. He is considered the inventor of the short message service: Dorsey posted the very first tweet in 2006. He ran the company from May 2007 to October 2008. He then founded the payment service Square and joined Twitter for a shorter period of time. Since returning to the top of Twitter, he has run both companies at the same time – a double burden that has raised concerns among some investors. Dorsey had to agree to business targets to appease them.
Under his leadership, Twitter largely managed to get out of the long-standing red figures – even if a settlement payment after an investor lawsuit led to a high loss again. At the same time, Twitter, with its business model, in which advertisers can bring tweets into the users’ timeline for money, does not come close to the advertising revenues of Metas Facebook.
In the 2020 US election campaign and the pandemic, Twitter under Dorsey took a tough stance against vaccine misinformation and Donald Trump’s claims that his White House victory was stolen by fraud. Dorsey was attacked because of this by the Republicans in hearings in the US Congress.
Twitter shares lag behind competition
Twitter has been lagging behind the broader market for a while. While Twitter shares rose 79 percent during Dorsey’s tenure, the NASDAQ 100 tech value index rose 276 percent and the S&P 500 rose almost 150 percent, according to the Bloomberg news agency.
On the stock exchange, Twitter currently has a market capitalization of around 40 billion dollars. Compared to other well-known tech companies, that’s very little.