Twitter Inc shares popped on Wednesday after it became clear that the firm’s board had made their choice on CEO. Re/code reported yesterday afternoon that the firm had picked short term CEO Jack Dorsey to fill the role. It’s not the first time we’ve heard that we’re on the cusp of that announcement, but Wall Street is taking it more seriously this time around.
Trip Chowdhry thinks that Wall Street’s interest in growth in social and web stocks is waning, and that’s going to lead to lower multiples for firms, like Twitter, in that field from now on. Mr. Chowdhry reckons there is little to no difference between Twitter and Yahoo. That’s not what Twitter investors, who drove the price of shares up 5 percent on Wednesday, want to hear.
Twitter picks a horse
If the Re/code report is right we could hear from Twitter itself that Jack Dorsey will take the job this morning. Despite the quick rise in the price of shares that was seen after the report emerged on Wednesday, Mr. Chowdhry was quick to deny that the change would have any major effect on the firm’s long term future. He made the comments in conversation with Benzinga.
Mr. Chowdhry says that though the next two quarters may look good for Twitter, in the long run the firm needs a leader that’s able to create new markets. In his view Mr. Dorsey is about new products, but that’s not what Twitter needs to keep it growing.
He said that bringing back Mr. Dorsey is simply “sugar coating” the reality of Twitter business. In his view a rise in the price of the firm’s shares is a good chance to sell out and take profits for those that have been playing the low share prices in recent weeks.
Jack Dorsey returns to Twitter
If Mr. Dorsey is indeed picked as Twitter CEO it won’t be his first time on the job. The exec lead the firm from when it began right up until 2008. He was replaced for numerous reasons from being seen as a poor manager to being too interested in things that had nothing to do with the business.
Now he’s back after building a new successful venture at Square. As far as anyone can tell he has no intention to leave the payment processor. For the time being Mr. Dorsey will be CEO at both Twitter and Square, and he’ll have to divide his attention between the two.
This all assumes, of course, that Mr. Dorsey is indeed going to be picked up as full time CEO at Twitter. The exec has long been rumored to be first in line for the job. Bob Peck of SunTrust has tried to predict his date of his taking the place, though with little success.