During the weekend Twitter saw some high profile exits. Media head Katie Jacobs Stanton (Its about time) and Product head Kevin Weil have resigned. CEO Jack Dorsey tweeted about the exits.Twitter Executive Departures: Is this the beginning of the End for Twitter? #TwitterBreakfastShow Click To Tweet
Was really hoping to talk to Twitter employees about this later this week, but want to set the record straight now: pic.twitter.com/PcpRyTzOlW
— Jack (@jack) January 25, 2016
Kevin Weil’s tweet:
— Kevin Weil (@kevinweil) January 25, 2016
Even Twitter’s Vine unit, Jason Toff is leaving as he announced his plans on Sunday.
The decision to leave Vine was hard. I love the team, am so proud of what we've done and know there are incredible things ahead for them.
— Jason Toff (@jasontoff) January 25, 2016
This means that major players from the top layer have left a big gap at the top.
Here is a useful table from Bob peck of Suntrust on the employee situation at Twitter.
Impact of Executive Exodus at Twitter
Business Insider shares the quotes from two investment analysts on the latest events at Twitter and its impact on the company’s stock and future.
Bob Peck at SunTrust, who has a “Buy” rating and $26 price target on the stock, wrote in a note early Monday that, “Investors we speak with are almost universally negative on Twitter and its prospects.”
Scott Devitt at Stifel added that, “While we may not be the sharpest tools in the shed, we don’t see how the departure of the heads of three major business divisions can be viewed as a positive in the middle of an attempted business turnaround.” As a result, Devitt cut his rating on the stock to “Hold” from “Buy,” reversing an upgrade he’d made just a few months ago.
The phrase “Universally Negative” is the operative one here. With competition coming in from the other social media companies, Twitter’s future will be challenging. Does an exodus mean that it might be a beginning of the downslide for Twitter?
The company has lost most of its value this year – from a high of $53.49 and even the IPO price of $26 in November 2013.
Slowing user growth and mainstream traction are two factors that are impacting the uneasy feeling amongst the investors with respect to Twitter’s stock.
In the third quarter, monthly active users rose more slowly than expected to 320 million. Excluding “fast followers,” who are SMS users, Twitter had 307 million monthly active users. Both figures were below Wall Street consensus. Facebook has about five times as many users as Twitter.
Jack Dorsey and his Turnaround Work
Jack Dorsey had joined as Interim CEO in July 2015 and was appointed CEO in October 2015 and is undertaking a complete overhaul of the company. He laid off 8% of the staff last year.
Twitter said in a regulatory filing Tuesday that on Monday “the board of directors of the company approved a restructuring and reduction in force plan of up to 336 employees, constituting approximately 8 percent of the company’s global workforce.”
Some important changes have been to consider increasing the 140-letter limit to 10,000. Also starting of the “Moments” feature. The advertising business under COO Adam Bain has been doing well. But the traction and user slowdown isn’t helping!
Featured Image Source – CNN Money