A shareholder in Twitter Inc. TWTR and New York University business professor wrote an open letter Friday to the company's board calling for the replacement of CEO Jack Dorsey.
What To Know
Scott Galloway, who owns more than 330,000 shares of Twitter stock and is a marketing professor at NYU, said he primarily was seeking to have Dorsey replaced, but would resort to trying to force the replacement of members of the board of directors if necessary to get Dorsey fired.
"A part-time CEO who is relocating to Africa? Enough already," Galloway wrote in his letter addressed to board chairman Omid Kordestani.
Dorsey said recently he would be spending three to six months in Africa because of business opportunities there, particularly in cryptocurrency and for the payments app from Square Inc SQ, of which Dorsey is also CEO.
Others Question Move
Galloway isn't the only one raising questions about Dorsey's commitment to Twitter.
Wedbush Securities analyst Daniel Ives told CNBC this week it could be problematic for shareholders.
“The Africa tweet raises eyebrows for investors as Dorsey is the CEO and visionary for Twitter at a time the company needs him at the helm,” Ives said on the network.
Galloway, who a decade ago led a dissident shareholder campaign against the New York Times Co NYT, said in his letter that Twitter has underperformed and noted shareholder return is down against several competitors since Dorsey returned to the company in 2015. He also said Dorsey essentially works part-time at Twitter.
Galloway said Twitter's shortcomings have been overlooked because a certain globally-watched figure has made Twitter essential.
"The poor performance has been somewhat wallpapered over by President Trump," Galloway wrote. "His decision to communicate and govern via 280 characters creates a sugar high that masks the underperformance of management, and will not last. Few people have benefited more from Donald Trump’s election than Jack Dorsey."
"Any examination of what ails the firm leads to one diagnosis: poor governance that tolerates what only eight firms in the Fortune 1,000 endure: a part-time CEO," Galloway wrote.
Neither Twitter nor Dorsey immediately responded to Galloway's letter.
Twitter's stock traded around $30 per share at time of publication.
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