Twitter Shares Pop, Outpacing Buoyant Election Day Market As Elliott, Board Back Jack Dorsey
Shares of Twitter outpaced the broader market election day Tuesday after activist investor Elliott Management and the company’s board backed current leadership including CEO Jack Dorsey at the conclusion of a strategic review initiated last spring.
The shares were up nearly 6%, outrunning a 1.55% bump in the S&P 500. It’s a welcome pop. Twitter stock plunged 20% after quarterly results last Thursday showed a dip in daily active users, and it’s had a tough time regaining its footing. Stocks gained across the board as investors hoped for a clean win. The DJIA was up 565 points, or 2.10%. The tech-heavy Nasdaq gained 1.88% ahead of market close.
In an SEC filing, the company announced that a new so-called management structure committee had concluded its work with recommendations, which the board accepted, included expressing “its confidence in management.”
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Elliott unveiled a 4% stake in Twitter early this year and began to push for change at the company, the board and management that appeared to put co-founder Dorsey’s tenure at risk. Elliot was concerned at his double role as CEO of payments company Square, which he also co-founded. An agreement in March included a $1 billion investment in Twitter by Silver Lake, two new board members (from Elliott and Silver Lake respectively) a $2 billion share repurchase program and the formation of this committee to further examine management and corporate governance.
According to the filing on Monday, the committee “assessed the current management structure, new operating plan and procedures put in place by the Company’s CEO, as well as the Company’s significantly improving product, operational and financial performance through the most recently reported quarter. The Committee expressed its confidence in management and recommended that the current structure remain in place.”
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