What Does The Future Hold For Jack Dorsey?
A year after his return as CEO, Dorsey has not made much progress as live streaming and live products have not spurred much growth.
Dorsey, argued that the 10-year-old company should remain on its current course and work to capitalize on recent product improvements and success in streaming live video, people familiar with the discussions said. Others were in favor of exploring a sale. Directors agreed they had a fiduciary duty to consider that option. The board ultimately decided to consider takeover prospects after getting an expression of interest from a potential acquirer, which led it to hire Goldman Sachs and Allen & Co. to evaluate possible bids.
As of market close yesterday, the stock was trading at $23.50/share and has a cumulative return of -14.74%.
Although through all the trial and error one thing remains true, Jack Dorsey is losing control of the company he created.
“The lack of growth in users and engagement underscore that Jack’s initiatives thus far haven’t really been effective,” said Robert Peck, an analyst at SunTrust Robinson Humphrey Inc. “If this whole ‘live’ idea doesn’t work, then what is it that gets Twitter to grow?”
His leadership styles has been deemed 'socratic' by some at the firm.
The best-case scenario, Slingerlend said, would be an acquisition by Disney. As Twitter becomes more of a media company, the two make for a good fit, he said. And Disney’s CEO, Bob Iger, has experience bringing a brand back to life.
Don't get me wrong, Dorsey is a great entrepreneur BUT do you think he can be there if they need a completely different turnaround with him at the helm?
I honestly think Disney could probably really help them find their scope. Twitter was never a TRUE social media website, its more a media/news/celebrities insight tool. I know for sure I follow way more VC's on Twitter than friends.
Agreed, I also like it more for a real time news ticker rather than hearing my friends opinions on things.
We can ship Dorsey off with the cannibal because Twitter never has, probably won't, find it's ray of sun trying to be the next Facebook.
If Twitter is acquired, I don't think he'll stay on as CEO.
I absolutely agree. He's certainly built a huge following and 'great' platform but to take it to the next level, I think two things need to happen:
A lofty compensation after he's no longer a CEO
Probably a longer beard and some artisan pickles. Oh yeah, and turns out Square's kinda a thing.
Twitter is a dog. I remember having to tell our PMs a year ago to sell this name immediately. If you look at facebook MAUs have grown at a VERY consistent 10-15% y/y clip since going public. TWTR MAU growth has decelerated at unprecedented speed to nearly flat the past two quarters. I also found it very suspicious when they added then removed SMS users from their MAU figure.
There's no doubt that FB is the highest quality name in the space. FB has traded at highly consistent 10-15x NTM EBITDA, I believe TWTR is currently in the ~20x.
People forget these guys make money off of advertising not user growth. FB knows where you live, what you like, your age, everything about you. The ROI to a company advertising on FB seems substantial. Furthermore, people spend far more time on the platform. On TWTR, they have very little information on you and when they advertise it simply saturates the user experience given it's a quick platform.
I simply don't see why someone would purchase TWTR at these prices. Think about it, what incremental value would it add to these companies? It certainly wouldn't be Accretive.
I could see YELP being purchased long before TWTR simply for the data.
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