Chief Executive Officer Jack Dorsey of Twitter Inc is stepping down, and Chief Technology Officer Parag Agrawal will take over as CEO, the social networking site stated on Monday.
Even if investors were skeptical, the appointment of Agrawal, a 10-year Twitter veteran, signified a tacit endorsement by the board of a strategy the business had previously laid out to double annual revenue by 2023.
Following the announcement, Twitter’s stock rose nearly 10% before falling 2.7 percent.
Dorsey, who co-founded Twitter in 2006, is stepping down after supervising the development of new ways to publish content, such as newsletters and audio discussions, while also serving as CEO of Square Inc., his payments processing startup.
He also negotiated the turbulent years of US President Donald Trump’s presidency before barring the Republican from the platform following the Jan. 6 attack on the US Capitol.
The new CEO will take effect immediately, while Dorsey will continue on the board of directors until his tenure ends at the 2022 annual shareholder meeting, according to the business.
Dorsey announced his decision to step down in an email to Twitter employees on Monday, citing the strength of Agrawal’s leadership, the appointment of Salesforce Chief Operating Officer Bret Taylor as the new chairman of the board, and his belief in the “ambition and potential” of the company’s employees.
He wrote, “I’m extremely sad… yet really happy.” “Not many firms reach this level,” he said, adding that his choice to step down was “my decision and I own it.”
In an email to staff, Agrawal stated, “We just modified our strategy to accomplish ambitious targets, and I consider that plan to be bold and right.” “However, how we strive to execute on it and generate results is our essential task.”
Over the last year, Twitter has worked to dispel years of criticism that it was reluctant to provide new features for its 211 million daily users and was losing ground to social media competitors such as Instagram and TikTok.
Twitter purchased email newsletter business Revue and debuted Spaces, a feature that allows users to host or listen to live audio discussions, under Dorsey’s leadership.
A crucial component of the company’s plan to double annual income by 2023 is to improve advertising to help brands locate Twitter users who are likely to be interested in their product.
However, Twitter’s stock has been falling in recent months, putting pressure on Dorsey to relinquish his unusual dual role as CEO of two public firms.
Elliott Management Corp urged Dorsey to resign after the hedge fund claimed he was devoting too little attention to Twitter while also heading Square Inc.
Dorsey defused the situation by appointing Elliott and his ally, Buyout Company Silver Lake Partners, to the Twitter board of directors.
Elliott Managing Partner Jesse Cohn and Marc Steinberg, a senior portfolio manager, approved the baton passing in a joint statement released after the news. “We believe they (Agrawal and Taylor) are the proper leaders for Twitter at this critical juncture in the company’s history.”
According to a source familiar with the situation, Dorsey will now focus on leading Square and other endeavors such as philanthropy.
According to the insider, the company’s board has been planning for Dorsey’s departure since last year.
FOCUS ON ENGINEERING
The choice of Agrawal as Twitter’s new CEO indicates that engineering is the company’s top focus.
Agrawal has aided with the integration of cryptocurrencies and blockchain technologies into Twitter, as well as the company’s long-term goal of reshaping how social media firms operate.
He’s been a prominent figure in Bluesky, a Twitter-funded group working to create a “decentralized” common standard for social media firms. Different social platforms would be able to use the same technology and users would be able to post material across services, for example.
According to Dorsey, Bluesky’s work will take years to complete.
For the time being, analysts from Baird Equity Research wrote on Monday that investors are expecting Agrawal’s technical prowess would help Twitter’s advertising “engine” thrive.
The majority of Twitter’s revenue comes from advertising on its website and app. However, advertising experts claim that its capacity to provide highly targeted advertising to generate product sales has trailed considerably behind larger rival Facebook.
The company previously stated that it aimed to develop its highly targeted advertising segment to 50% of its sales, up from 15% today.
As investors processed the news, they likely recognized Agrawal’s “mountain to scale” in order to meet the company’s revenue goals and expressed “some displeasure that a Twitter outsider hasn’t been brought in to bring fresh ideas,” according to Susannah Streeter, an analyst at Hargreaves Lansdown.
