You can be a quirky leader, but if your company is doing well financially, that's all that matters. That's the conclusion of a Twitter board committee reviewing whether or not CEO Jack Dorsey should remain in his position, Bloomberg reports.
The committee was asked to review Twitter's leadership after activist investor Elliot Management and private equity firm Silver Lake both took stakes in the company. Dorsey has been criticized for running two public companies — Twitter and payments company Square — simultaneously. He has said that he splits his time between them 50-50; some believe both companies would benefit from having full-time CEOs instead. Dorsey also infamously planned to spend six months working in Africa, before investor outrage put paid to those plans.
Mediocre growth — Supporting their argument is the fact that Twitter has never grown at the exponential scale expected of tech companies. When it went public in 2013 the social network had 230 million monthly active users. Seven years later it sits at approximately 330 million monthly active users. Compared to Facebook's stratospheric growth, it's pedestrian.
Engagement first — For context, Facebook has four billion monthly active users today as compared to one billion when it went public in 2012. Twitter says that its daily active user metric, currently at around 190 million, is the datapoint that matters, arguing that engaged users are more important than people who visit infrequently.
Twitter benefits from being a highly influential platform where world leaders and celebrities gather to communicate with the public. Facebook previously tried in vain to replicate Twitter's nature as a public town square but mostly failed as its platform is designed as a space for communication with friends and family (or, increasingly, other users with niche interests, like white supremacy).
Despite low growth, Twitter's underlying business is strong. Major brands are investing in advertising on the network as new tools have been introduced that enable companies to better curate who can reply to their tweets — a reason the board cited to keep Dorsey. Twitter reported strong revenue last week of $936 million for the third quarter, above estimates of $777 million. That's up 15 percent over last year despite the coronavirus pandemic.
Twitter is facing a lot of criticism from legislators over its recent censorship of a New York Post article, though in hearings Dorsey has held his own, arguing that Congress should provide more transparency over what social media platforms can or cannot censor.
Everyone wins — “The committee expressed its confidence in management and recommended that the current structure remain in place,” the filing reads. “The board will continue to evaluate company and management performance according to a range of factors, including the company’s operating plan and established milestones.”
For their part, even though they didn't get a new CEO, Elliot and Silver Lake largely got what they were looking for, which was a rising stock price. Since buying their stakes in February, Twitter's shares have appreciated about 19 percent.