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Jack Dorsey To Continue As Twitter CEO, Calls Truce Will Elliott Management

Twitter Inc. (NYSE: TWTR) chief executive officer Jack Dorsey will continue in his role, as a "cooperation agreement" signed with Elliott Management.

Benzinga · 03/10/2020 09:55

Twitter Inc. (NYSE: TWTR) chief executive officer Jack Dorsey will continue in his role, as a "cooperation agreement" signed with Elliott Management.

What Happened

The social media company on Tuesday said it would buy back $2 billion, or about 7.9% of its shares, as part of the agreement.

Twitter also announced a $1 billion investment from private equity from Silver Lake Partners that it said would be used for the repurchase program.

Elliott's Jesse Cohn and Silver Lake's Egon Durban would be appointed to the Twitter board of directors. Twitter would also search for a third independent director to join the eight-strong board, per the statement.

"We invested in Twitter because we see a significant opportunity for value creation at the Company," Cohn said in a statement. "I am looking forward to working with Jack and the Board to help contribute to realizing Twitter's full potential."

"We are deeply proud of our accomplishments and confident we are on the right path with Jack's leadership and the executive team," Patrick Pichette, lead independent director of the Twitter board added.

Why It Matters

Elliott was reportedly pushing to oust Jack Dorsey as Twitter CEO after it acquired about a 4% stake in the company late last month.

The activist investment firm was said to discontent with Dorsey leading another public company Square Inc. (NYSE: SQ) at the same time. The 43-year old's intent of working remotely from Africa for six months was also reported not to have gone well with Elliot.

Speaking at a Morgan Stanley (NYSE: MS) event last Thursday, Dorsey defended Twitter's performance over the last few years. "[Five] years ago we had to do a really hard reset and that takes time to build from," he said.

Price Action

Twitter's shares traded 3.2% higher at $33.5 in the after-hours session on Monday. The stock closed the regular session 3% lower at $32.46 per share.