Twitter CEO Jack Dorsey’s resignation leaves behind content controversy, sagging stock
Twitter founder Jack Dorsey said Monday he’d step down as CEO after a series of missteps — including the censoring of a bombshell story on Hunter Biden — and a share price that stubbornly lagged behind peers.
The long-bearded and nose-ringed Dorsey, who had been under pressure from hard-charging billionaire Paul Singer’s hedge fund Elliott Management after doing double duty as CEO of Twitter and payments giant Square, said a hand-picked successor, Parag Agrawal, would succeed him.
Agrawal, who started at Twitter in 2011 as a software engineer and has served since 2017 as the company’s chief technology officer, could more forcefully push the company toward arenas beyond its 280-character social posts. He has led Twitter’s artificial intelligence and machine-learning efforts.
But he’ll also be walking into a hornet’s nest when it comes to the company’s role as an arbiter of content.
Dorsey was blasted during his tenure after Twitter blocked the account of the New York Post for its exclusive reports in October 2020 on the contents of a hard drive that held emails and other materials from a laptop that was abandoned at a Delaware repair shop by Biden’s son, Hunter.
The company also drew fire from some who said it was part of the Big Tech censorship brigade that shut former President Donald Trump out of social media when it banned his account after the January 6 Stop the Steal riots.
Already, Agrawal has been involved in the company’s efforts to fight so-called “misinformation,” which he struggled to define in a November 2020 interview with the MIT Technology Review.
“I think that’s the, the existential question of our times,” he said, according to a trasncript of an interview with the publication. “Defining misinformation is really, really hard. As we learn through time, our understanding of truth also evolves.”
Agrawal claimed the company wouldn’t try to “adjudicate truth,” but instead would focus on “potential for harm” when it comes to certain content. He didn’t comment on The Post’s reports in the transcript of the interview.
Adjudicating content is one area where Dorsey stumbled badly — and he admitted as much, but only after the damage was done. He told lawmakers after the service blocked The Post’s accounts that the handling of the reports was a “total mistake.”
Twitter locked The Post’s main account for two weeks while demanding that The Post delete six tweets with links to stories that Twitter claimed — without any evidence — were based on hacked information.
Twitter also obscured the tweets from public view, but The Post held fast as outrage against Twitter mounted, leading the social company to back down and announce it was revising its “Hacked Materials Policy” and “updating our practice of not retroactively overturning prior enforcement.”
Agrawal said Monday that he was “incredibly energized” by what’s ahead. Dorsey will remain on Twitter’s board of directors until his term expires at the 2022 annual meeting, the company said. Salesforce President and Chief Operating Officer Bret Taylor, who’s been a member of the Twitter board since 2016, will take over as the company’s chairman.
“I’ve decided to leave Twitter because I believe the company is ready to move on from its founders,” Dorsey said in a letter he posted to Twitter.
He’ll have his work cut out for him: Twitter’s share price is down more than 1.5 percent over the past year, when compared to gains of 10 percent at archrival Snap over the same time frame and more than 22 percent at Meta, or the former Facebook Inc. (The broader market has gained nearly 30 percent over the past year.)
Critics of Dorsey have long been skeptical of his dual roles as CEO of both Twitter and payment-processing firm Square, charging that he can’t effectively manage both multi-billion dollar companies.
Investors seemed to be cheered by Dorsey’s exit, sending Twitter shares spiking more than 11 percent in the wake of the news, but by the end of trade Monday, shares had given up their gains and were down more than 2.6 percent.
Elliott Management, the New York-based hedge fund, previously disclosed a substantial stake in Twitter. In 2020, the hedge fund sought to replace Dorsey as CEO and force the company to make other changes to its corporate structure.
Twitter and Elliott later reached an agreement that saw Dorsey keep his job. At the same time, Twitter agreed to add three new directors to its board and laid out an aggressive multi-year growth plan that includes doubling annual revenue by 2023.
Agrawal will now be tasked with hitting those lofty targets. In a statement, Elliott’s managing partner Jesse Cohn and senior portfolio manager Marc Steinberg said they believe he’s the right man for the job.
In an email to staff that he later shared on Twitter, Agrawal said he believes the multiyear plan established with Elliott is the right path.
“We recently updated our strategy to hit ambitious goals, and I believe that strategy to be bold and right. But our critical challenge is how we work to execute against it and deliver results — that’s how we’ll make Twitter the best it can be for our customers, shareholders, and for each of you,” he said.
Dan Ives, managing director at Wedbush Securities, said the appointment of Agrawal, a company insider, as Dorsey’s successor was something of a “safe choice” and follows the succession path of other Big Tech firms like Microsoft and Google.
“It opens up a range of possibilities that Twitter can go after in this social media arms race,” he said in an interview. “There’s a big focus on the Metaverse if you look at Apple, Facebook, Google and others. Twitter’s been nowhere to be found when it comes to the Metaverse, so that could be one area it could aggressively go after.”
He added that there’s been pressure building on Twitter for years as its stock price has lagged others in the tech sector. He called Agrawal “extremely well respected within the tech community” as well as specifically within Twitter, making him a natural pick.
Dorsey founded Twitter and first served as chief executive until 2008 when he was pushed out of the role by the board. Shortly after his ouster, Dorsey founded Square, the company he now also runs alongside Twitter.
He rejoined Twitter as CEO in 2015 after former CEO Dick Costolo stepped down.
Under his leadership, the company maneuvered the Trump era, which was rocky for all social media giants, including Twitter rival Facebook.
As president, Trump repeatedly used Twitter as a platform to connect with his base, attack his enemies and publicly reward his allies.
But Twitter permanently banned Trump from the service on Jan. 8 after the Stop the Steal rally of January 6 “due to the risk of further incitement of violence,” according to the company.
