Activist investment firm Elliott Management Corp is reportedly planning to make big changes in the operations of social media giant Twitter. According to reports citing sources with knowledge in the matter, part of the plan will apparently include the possible removal and replacement of Twitter CEO Jack Dorsey.
The report revealed further than the Elliott Management Corp, founded by billionaire Paul Singer, has apparently purchased a substantial stake in Twitter to enforce its planned changes. Its first course of action reportedly involved the nomination of four new members into Twitter's board of directors, three of which are expected to fill the vacant seats at the company's annual meeting later this year.
The New York-based investment management firm is reportedly also conducting "constructive discussions" with Twitter executives regarding its plans for the company. The same report alleged that Elliott Management Corp intends to replace Dorsey as the head of the social media giant. The identity of his replacement or whether or not the firm has decided on a candidate remains unknown.
Both Twitter and Elliott Management Corp have declined to comment on the reports published over the weekend. Both companies also did not immediately reveal how many shares Elliott Management Corp had bought and how much it had paid for the shares.
Unlike other US tech giants such as Google and Facebook, who both issue multiple classes of stocks, Twitter only issues common stocks. This means that shareholders will have equal voting rights leaving the company vulnerable to major shareholders with their own agenda. Dorsey does own a few shares of the company, but it is reportedly not enough to sway decisions made by the majority.
Elliott Management Corp is known for its aggressive strategy in forcing companies it has a major stake in to adhere to its own plans. This has led to a reputation of it being one of the most successful activist investors in the market. Last month, the company revealed that it had bought a "substantial" stake in Softbank and has held talks with its executives to discuss prior failed investments, such as those made in WeWork and Uber.
Twitter initially managed to report its first annual profit in 2018. However, since that time the company has continued to suffer from a declining user base. Unlike its social media competitors, Twitter has been slower to implement new features and technologies into its platform. The company has also become the subject of controversy involving issues surrounding abuse, spam, and the spread of misinformation.
