Twitter Inc didn’t need to prepare any one for Monday morning’s announcement that Jack Dorsey, the firm’s ex-CEO and, up until this morning, caretaker, is going to be its CEO from here on out. Just because Wall Street, and the wider world, expected the statement doesn’t mean that Mr. Dorsey’s delivery of the news came in a comprehensive, or comprehensible way, however.
In a tweet before the market opened on Monday morning Mr. Dorsey said “We are naming @adambain COO of Twitter, we’re working to change the composition of our Board, and I will serve as CEO of Twitter and Square!” He added that he has already been serving as CEO of both firms for three months, something that doesn’t quite gel with what’s been going on at Twitter.
Twitter names CEO in weird way
For those hoping that Mr. Dorsey would improve the way in which Twitter communicates with the world, this morning’s CEO reveal is not a good sign. Not only did Mr. Dorsey confuse with his statement that he’s been CEO at Twitter for the last three months, he kept bringing the fact that he is leading Square, a payments firm rumored to be heading for IPO, into the whole deal.
Mr. Dorsey took over from Dick Costolo as temporary CEO of Twitter on July 1. Part time CEO is, of course a very different kind of role than a CEO that’s responsible for the long term future of a firm. Jack Dorsey, as far as Wall Street knows, only made that transition over the weekend. In Mr. Dorsey’s mind, it seem, there hasn’t really been much of a change at all.
That’s a weird way to reveal a CEO, and it may have something to do with the low premium being paid for Twitter shares on Monday compared to Friday. Shares were higher last Monday September 30, when rumors suggested that Mr. Dorsey would be named to head the firm than they are now, in the wake of a real reveal.
Twitter Inc has a plan for the future
Bob Peck of SunTrust, the Wall Street analyst who has been most active in talking about the Twitter CEO search, forecast that Mr. Dorsey would be named to head the firm more than a month ago. His timeline was off, but his pick was focused right.
Mr. Peck likes Dorsey as CEO because of his product acumen. Since the Square CEO took over as caretaker in July he’s brought a wide range of changes and new features to Twitter. In the wake of this morning’s reveal Mr. Peck said that it could form the “basis of tangible positive change for the company going forward.” Research house Baird called the move a “step in the right direction.”
Axiom Capital, another sell side research concern, raised its price target to $37 on the big reveal.
At time of writing shares in Twitter were trading for $26.70, up 1.48 percent for the day so far. When Jack Dorsey took over as part time CEO on July 1 shares in the micro-blogging platform were trading for more than $35.
The massive loss in value since, in his own mind, Mr. Dorsey took over as CEO at the firm is something that those with shares may resent going forward. That’s especially true if Twitter keeps trying to get its message across in this, what Chris Sacca, an early and major investor in the firm calls, “sloppy.”
Twitter will host a call at 5:30 AM Pacific Time today in order to add detail to this morning’s big Tweet.