Twitter Inc. TWTR -1.83% said Monday that Chief Executive Officer Jack Dorsey is stepping down, a departure that comes a year after he withstood a challenge from activist investors.
The Twitter co-founder, one of the most prominent figures in Silicon Valley, is also CEO of digital payments company Square Inc. While his split duties and personal eccentricities have long drawn criticism, many employees have hailed him as a stabilizing force within the social-media company since he returned the CEO role in 2015.
“I’ve decided to leave Twitter because I believe the company is ready to move on from its founders,” Mr. Dorsey said in a statement.
Twitter’s board of directors named Parag Agrawal CEO and a member of the board, effective immediately. Mr. Agrawal was previously Twitter’s chief technology officer.
Bret Taylor, Salesforce.com Inc. president and chief operating officer, was named chairman of the board.
Twitter shares jumped on the news, rising as much as 11% before they were halted ahead of the announcement. After rising sharply early in the pandemic, Twitter shares have underperformed recently, dropping more than a third over the past six months.
Mr. Dorsey’s move doesn’t affect his position at Square, which he also co-founded. With a market capitalization of almost $100 billion, Square is more than twice as valuable as Twitter, which is valued at about $37 billion.
With his long beard and nose ring, Mr. Dorsey, 45 years old, is one of the business world’s most enigmatic figures, with a management style that involves delegating most major decisions to subordinates, in part so he can pursue his personal passions. Lately, he has been a vocal proponent of cryptocurrency and an increasingly active philanthropist.
Mr. Dorsey has left Twitter previously. In 2008, the company fired him over concerns about his management and absenteeism.
Last year, his leadership drew scrutiny from Elliott Management Corp., which is known as one of Wall Street’s toughest activist investors. Twitter and Elliott reached a deal in which the company agreed to appoint two board members and commit to $2 billion in share buybacks, and Mr. Dorsey was allowed to stay on as CEO.
Mr. Dorsey will remain a member of Twitter’s board until his term expires in 2022, the company said. Elliott said Monday that it believes Messrs. Agrawal and Taylor are the right leaders for the company. CNBC earlier reported Mr. Dorsey’s plans to step down as CEO.
Known for its short-form messaging service, Twitter is a popular venue for political and pop-culture discourse, but it has struggled to find sources of growth.
Twitter use, measured by monetizable daily active usage, was up 13% year-over-year to 211 million in the third quarter, topping the 11% increase in the second quarter. That user base remains a fraction of the size of the other major social-media platforms, including Meta Platforms Inc. ’s Facebook, Alphabet Inc. ’s YouTube and ByteDance Ltd.’s TikTok.
Twitter is increasingly experimenting with new products. In the third quarter, it launched a pilot of a shopping feature called Shop Module that allows businesses to showcase their products at the top of their profiles and users to purchase items without having to leave Twitter. The company also launched a subscription service this year.
Not all such efforts were successful. In July, the company said it would scrap its Fleets feature, which allowed people to post tweets, pictures and videos that would disappear after 24 hours.
For years, the company’s highest-profile user was former President Donald Trump, until Twitter permanently suspended his account early this year, citing the risk of incitement of violence following the Jan. 6 attack on the U.S. Capitol by a mob of his supporters. The move renewed longstanding complaints from conservatives who said the company is biased against them, allegations that Mr. Dorsey has denied repeatedly before Congress.
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