Jack Dorsey Keeps His Top Job At Twitter After A Billion Dollar Deal With Hedge Fund
Twitter Inc and activist hedge fund Elliott Management Corp. have called a truce and announced an agreement that will allow Twitter CEO Jack Dorsey to continue as the CEO of the company, The Wall Street Journal reported.
Under the new agreement, Twitter will appoint two new board members while continuing to search for a third, independent director.
Twitter will also be buying $2 billion in share repurchases—or around 8 per cent of the company’s stock at Monday’s (9 March) closing price. The buyback will be partly funded by a $1 billion investment from technology-focused investment firm Silver Lake.
“Twitter Inc (NYSE: TWTR) today announced that Silver Lake, a global leader in technology investing, will make a $1 billion investment in Twitter,” the company announced in an official statement.
“Twitter also entered into a Cooperation Agreement with Elliott Management Corporation (“Elliott”), an investment firm whose affiliated funds own approximately 4 per cent of the Company’s common stock and economic equivalents. The Company expects to use Silver Lake’s investment, together with cash on hand, to fund a $2 billion share repurchase program that will be executed over time,” the statement added.
The US-based Hedge Fund and activist investor Elliott Management Corp in February aggressively amassed a big stake in the company. In tune with its typical operating model, it was expected that the hedge-fund would usher in major organisation changes included attempting a hostile ouster of the social media giant’s CEO, Jack Dorsey. Dorsey has invited the ire of few investors for splitting his time between Twitter and Square Inc., a financial technology company he also co-founded and for which he serves as chief executive.
The micro-blogging platform also shared its ambitions for 2020. It said it would try its best to win a greater share of the digital advertising business, where it has trailed behemoths such as Facebook Inc. and Google.
“The ambition in 2020 and beyond is to grow mDAU at 20 per cent or more, and looking beyond 2020, to accelerate revenue growth on a year-over-year basis and gain share in the digital advertising market as Twitter continues to invest to drive growth,” it said in its statement.
Twitter also resolved to grow daily average use rate 20 per cent or more per year. Twitter has 152 million daily average users, according to its latest quarterly figures. Facebook, which started just two years earlier now has more than 1.6 billion monthly users.
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