Social media firm Twitter has managed to strike a deal with activist shareholder Elliott Management to keep its current CEO, Jack Dorsey. The activist hedge fund previously expressed its intention of replacing Dorsey as part of its efforts to stimulate growth and innovation within the California-based company.
Under the deal, Twitter had agreed to include a $2 billion share buyback program. Elliott Management will also be allowed to take place on the company's board of directors, giving it more power over future decisions that will be made within the firm.
The well-known activist investor had previously called for significant changes at the company, including a possible reshuffling of its top executives. The move even led to a decision by Dorsey to cancel his plans of going to Africa; a decision that Dorsey claimed had nothing to do with Elliott Management's threats.
To boost its available capital and to increase its control over the company, Elliott Management has arranged for tech investment firm Silver Lake to invest $1 billion on Twitter. Under the agreement, Silver Lake will also be getting a seat of Twitter's board of directors. According to a press release, Twitter is currently looking for a third investor to become one of its board members.
In the press release, Dorsey stated that the additional investment made by Silver Lake is a testament to the strong confidence in the company's business. The executive added that Silver Lake is one of the most respected companies in tech and finance and their support should help Twitter in its future growth.
Silver Lake is currently one of the major players in the technology investment sector, with over $43 billion in assets placed in media and tech-focused companies worldwide. The California-based private equity firm currently has investments in major media and tech companies such as Alibaba, the Ultimate Fighting Championship, Oak View Group, and the Madison Square Garden Company.
Dorsey originally took the CEO position at Twitter back in 2015. Under his leadership, the company was able overcome massive challenges as other social media giants surpassed it in terms of users and revenues. Since then, Twitter has been able to see respectable user growth and profits.
However, Dorsey's leadership had come under criticism, particularly for his lifestyle that was unbecoming of a chief executive. Dorsey often takes long trips abroad, including multi-week silent meditation trips. Elliott Management's call to have Dorsey replaced was met with a show of support from Twitter employees who asked that he be kept on board as CEO.
