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ASSOCIATED PRESS
NEW YORK >> Twitter shares rose today following reports an activist investor took a stake in the social media service and plans to push for changes.
Elliott Management Corp. has taken a $1 billion stake in the company and plans to nominate four directors to the board, according to a person familiar with the matter who spoke on condition of anonymity. The Wall Street Journal reported the plans on Saturday, also citing an unnamed person. Elliott could be seeking to replace founder and CEO Jack Dorsey, according to the Journal report.
Twitter has lagged behind other tech powerhouses like Facebook and Google in terms of user growth and advertising revenue. Dorsey left the company to start payments company Square, but returned in 2015. Now he splits his time between Square and Twitter. Dorsey has also tweeted that he would spend three to six months in Africa this year, leading some to question who would be running Twitter.
In February the company reported fourth-quarter user numbers that exceeded expectations, but profit still fell as expenses rose. Twitter and other social media companies have been spending more to step up efforts to remove misinformation, abuse, hate speech and spam.
Twitter and Elliott Management declined to comment.
Shares jumped $2.78, or 8%, to $35.99 in midday trading today.
Founded in 1977 by Republican billionaire Paul Singer, Elliott has stakes in or owns a wide array of organizations including bookseller Barnes & Noble and soccer team AC Milan.
Elliott is known for pushing for changes at companies it invests in. In September it took a 1% stake in AT&T and advocated for selling assets and paying down debt. AT&T eventually agreed to look for more parts of its business to sell off and add two new board members. Elliott also advocated for changes at eBay, and the CEO of that company, Devin Wenig, stepped down in September.
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