Twitter Inc. (NYSE:TWTR) has been in the spotlight since the exit of CEO Dick Costolo was announced. The stock rose in the hours after the news. It appears that investors decided that Twitter was worth $900 million more without Costolo at the helm. However, the optimism has waned and the stock closed down with a loss of 3.45% to $34.66 in yesterday’s session.
The media is filled with opinions about who should take control of the company. Users have recommended a number of serious and not so serious contenders for the job. However, user opinion doesn’t usually affect a company’s management decision. This post attempts to covers analysts’ opinions on how Twitter ought to handle its quest for a CEO.
Jim Cramer: Twitter Could Fizzle and Fail
Mad Money Host, Jim Cramer has been consistent in his offering of unsolicited advice to Twitter. He raised some concerns last night about the events surrounding Mr. Costolo’s departure as CEO. He also talked about the apparent unpreparedness of Twitter to name a replacement CEO. Costolo has been contemplating an exit for the last six months and Twitter carried on as if all was well.
He is pessimistic about Twitter’s outlook going forward. According to him, “mark my words, if Twitter doesn’t get its act together, it will be the first big fizzle of the second Internet revolution,
Mark Mahaney: A New CEO won’t Necessarily Bring Change
An RBC Capital Market Analyst, Mark Mahaney has expressed concerns about the ability of a new Twitter CEO to bring much needed change. He opines that Twitter needs someone with a product, advertising, and marketing experience.
However, Twitter Co-founder and Chairman, Dorsey will be taking over in the interim. This suggests that Twitter doesn’t yet have a profile for the kind of CEO that can turnaround the company. In addition, Dorsey, Costolo, and Evan Williams, all former Twitter CEOs will remain on board. Hence, it is not likely that a new CEO, even from the outside will be able to effect much change within the company.
He is also worried about Twitter’s future. According to him, “I’ve never seen as much C-level turnover in a company 18 months post an IPO as you’ve got now with Twitter“.
Final Words on Twitter…
Twitter has lots of premise and promise, but it is strange that it hasn’t lived up to expectations. However, it is clear that the company will remain in a limbo until it shows some seriousness in its management direction. In the meantime, Merrill Lynch is maintaining its “Neutral” position on Twitter with a $44 price target. Argus has reaffirmed its “Buy” rating for Twitter as the company continues to monetize its growing user base.