Twitter Shares Pop, Outpacing Buoyant Election Day Market As Elliott, Board Back Jack Dorsey - Deadline

UPDATED at market close: Shares of Twitter outpaced the broader market on election day Tuesday after activist investor Elliott Management and the company’s board backed current leadership including CEO Jack Dorsey at the conclusion of a strategic review initiated last spring.

The shares closed up nearly 6%, outrunning the 1.78% bump in the S&P 500. It’s a welcome pop: Twitter stock plunged 20% after quarterly results last Thursday showed a dip in daily active users, and it’s had a tough time regaining its footing.

Stocks gained across the board today as investors hoped for a clean win. The DJIA ended up 554 points, or 2%. The tech-heavy Nasdaq gained 1.85%. It was the best session since July.

In an SEC filing, Twitter announced that a new so-called management structure committee had concluded its work with recommendations, which the board accepted, that included expressing “its confidence in management.”

Elliott unveiled a 4% stake in Twitter early this year and began to push for change at the company, the board and management that appeared to put co-founder Dorsey’s tenure at risk. Elliot was concerned at his double role as CEO of payments company Square, which he also co-founded. An agreement in March included a $1 billion investment in Twitter by Silver Lake, two new board members (from Elliott and Silver Lake, respectively) a $2 billion share-repurchase program and the formation of this committee to further examine management and corporate governance.

According to the filing Monday, the committee “assessed the current management structure, new operating plan and procedures put in place by the Company’s CEO, as well as the Company’s significantly improving product, operational and financial performance through the most recently reported quarter. The Committee expressed its confidence in management and recommended that the current structure remain in place.”

There are changes, including an updated succession plan. Twitter will also add a proposal to the 2021 annual meeting of stockholders to amend its bylaws to eliminate its classified board structure — meaning directors will now be elected for one-year terms.

Twitter has been front and center this election season. So has Dorsey and his surprisingly long beard, testifying with other tech CEOs before a Senate committee last week on its content policies. Democrats were concerned about how Twitter plans to deal with candidates’ premature declarations of victory. On Monday, the company updated its policy on labeling election results.

“Because this is an unusual election — restrictions in response to COVID-19 have led to historically high numbers of mail-in ballots, which may result in some state results not being resolved on election night — we are taking additional steps to provide context when results have not been officially called. We believe this is the right thing to do to protect the integrity of the conversation around the election while counting is ongoing and before results are announced by state authorities. Beginning on election night through the inauguration, we will label some Tweets that make claims about election results. We will be prioritizing the presidential election and other highly contested races where there may be significant issues with misleading information based on the below criteria,” the company said.

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November 04, 2020 at 03:01AM
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Twitter Shares Pop, Outpacing Buoyant Election Day Market As Elliott, Board Back Jack Dorsey - Deadline
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