Last week, Twitter's CEO, Jack Dorsey, faced calls for his ouster from an activist shareholder. Those calls came from Elliot Management's boss Paul Singer, who recently took a $1 billion stake in the social media company and has nominated four new board members.
Singer's main complaint seems to be that Dorsey currently serves as CEO both of Twitter and Square, the financial technology provider. Dorsey has a far larger financial interest in Square, and Singer believes that prevents him from giving Twitter the attention it deserves, despite recent growth in both users and revenue.
Yes, Twitter's performance has lagged behind its tech siblings. For example, Twitter's stock price is down a little over 6 percent since Dorsey returned as CEO in 2015. For comparison, Facebook's stock is up over 120 percent during that same time frame.
On Tuesday, Elon Musk threw his support behind Dorsey through a tweet (of course). Musk is obviously no stranger to running multiple companies, serving as the CEO of Tesla and SpaceX.
Just want say that I support @Jack as Twitter CEO. He has a good .-- Elon Musk (@elonmusk) March 3, 2020
Musk is clearly a fan of Twitter, using the platform to engage with both fans and critics, as well as to promote the companies he leads. He is also presumably friendly with Dorsey, even appearing at a recent company meeting. The outspoken CEO has also never been shy about taking on financial critics, especially those who short Tesla's stock.
There's some irony in that when Dorsey returned to Twitter, Musk advised him against running two companies. Now it appears Musk is firmly in Dorsey's corner.
Here's the reality, however--unless Musk plans to drop some of his cash into Twitter and nominate his own slate of directors, his words aren't likely to change much. In fact, some anaylsts are already assuming Dorsey will be out by the company's annual meeting, usually held in May. To that end, the company's stock price was up 8 percent on the news of Elliot's stake.
I actually think that the point here is similar to what I wrote about Disney's CEO Bob Iger stepping down: sometimes leading means getting out of the way.
I don't say that to imply Dorsey is a poor leader, or that he hasn't done a good job at Twitter, but I will say is that it's hard to argue that Twitter has lagged behind its peers. It just today announced it is testing a new feature called "Fleets," which is basically Instagram Stories. It also has struggled to figure out how to deal with fake news and misinformation that regularly spreads on its platform. Oh, and let's not forget the bots and trolls.
Sure, you could argue that Facebook has the same issues, and it does, but it's worth asking whether or not Twitter would benefit from a full-time, fully-engaged leader. That doesn't mean that Dorsey has failed, it just means it might be time to redefine what success really looks like.
That, by the way, is a lesson every entrepreneur should consider.