Hedge fund Elliott Management Corp has acquired a stake in Twitter Inc. and is pushing for changes, including the dismissal of social media company's CEO, Jack Dorsey, two people who are familiar with the matter on Friday.
Twitter is one of the few U.S. technology companies run by one of its founders but not controlled. It has given shareholders the same voting rights, making Dorsey, who owns only about 2% of the company, vulnerable to a challenge from an activist investor like Elliott.
Twitter shares fell last year when the company announced that its platform had malfunctions that affected ad targeting and data sharing with partners. The reluctance of the San Francisco-based company to expand beyond its core platform has made it available on social media to a limited extent compared to its larger counterparts.
Elliott, founded by billionaire Paul Singer, will try to include his own candidates on Twitter's eight-member board when three of the company's directors are up for election at the upcoming annual general meeting.
It is not clear who Elliott wants to replace Dorsey with and how big his share in Twitter is. The New York-based hedge fund manages more than $ 40 billion in assets and has been targeting companies ranging from eBay Inc to SoftBank Group Corp. in recent months. pass.
The sources asked not to be identified because the matter is confidential. Elliott declined to comment. Twitter did not immediately respond to a request for comment. Bloomberg News reported on Elliott's position on Twitter for the first time on Friday.
The 43-year-old Dorsey is one of the most famous entrepreneurs in Silicon Valley and also runs Square Inc, a company he co-founded for mobile payments.
While investors have tolerated this agreement since 2015, when Dorsey became Twitter CEO for the second time, his November announcement that he would like to move to Africa for up to six months raised analyst questions about his management.
Dorsey, who helped design Twitter in 2006, initially served as CEO until he was replaced in 2008 by one of his co-founders, Ev Williams. Williams had accused Dorsey of being a bad manager and not focusing enough on Twitter's profitability.
Dorsey returned as interim CEO after his predecessor Dick Costolo resigned. Dorsey's knowledge of the company and the rapid introduction of new products convinced Twitter's board to hand over the reins to him permanently a few months later.
Dorsey is not the first CEO to run two large companies. Steve Jobs directed Apple Inc and the animated film studio Pixar for several years, while Elon Musk leads the electric car pioneer Tesla Motors Inc and the rocket manufacturer SpaceX.
(Except for the headline, this story was not edited by NDTV staff and published from a syndicated feed.)