A slew of big exec exits hammers home what everyone knew: Twitter needs change
Twitter shares struggled to cope with news five top executives are out. But the more important question is: Who’s in?
Twitter shares took a drubbing Monday, falling as much as 7.5 percent, after CEO Jack Dorsey confirmed executive upheaval at the beleaguered social network.
The simultaneous departures, whether by their own revolt or by executive order, in a way gives investors just what Twitter needs: change. But uncertainty lingers about whether Dorsey’s are changes they can believe in.
“The departure of four…top 10 execs is a pretty broad acknowledgment of things not working there,” Wedbush analyst Michael Pachter told TheWrap. “A better test of Dorsey as CEO is who he hires to replace these people.”
The shake-up may put the company in a better position to execute on Dorsey’s plans or to potentially sell itself, analysts at Jefferies said in a note. But they added that at this stage, the impact is difficult to predict.
Gone are Twitter’s heads of engineering, product, human resources and media, as well as the leader of the company’s six-second video app Vine. On Sunday, Dorsey confirmed on his beleaguered social network that the first four executives “have chosen to leave” and would be taking “some well deserved time off.”
The fifth, Vine head Jason Toff, separately tweeted that he was departing to join Google’s virtual-reality work.
With the exception of Toff, “the coincidence is too great” that so many high-level managers all found new work at the same time, Pachter said. Dorsey characterized their departures as voluntary. (Twitter declined to comment beyond Dorsey’s Sunday tweet.)
But as Twitter stock tends to do lately, shares flopped.
The stock dropped as much as 7.5 percent to $16.51 after the market open Monday, before recovering some of the losses. It closed the day down 4.6 percent at $17.02.
More than half the company’s market value has evaporated in the last year, plagued by questions about its user growth and strategic direction. Critics complain that the network’s unusual rules, with its hashtags and 140-character limits on posts, make it inaccessible, stunting mainstream appeal.
Even Dorsey’s method of explaining the departures underscores how unaccommodating Twitter can be. With only 140 characters at his disposal to explain major management upheaval, Dorsey tweeted a picture of his statement rather than sharing it outright. His thoughts on the matter were about 1,600 characters too long.
The company could name American Express’ advertising, marketing and digital partnerships executive Leslie Berland as its marketing chief this week, possibly as soon tomorrow, according to Recode.
Twitter’s quarterly earnings report on Feb. 10 is the next scheduled event that may give watchers a peek at its direction.