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Twitter shares plunged 8.4% on Thursday as Wall Street prepared for the company to appoint a new CEO who will continue to do double duty as the top chief of a separate company.
Twitter had yet to announced that cofounder Jack Dorsey will become permanent CEO after Thursday’s close of market, but investors expect an announcement anytime in the coming days.
Dorsey is also the CEO of digital payments company Square, and all indications are that he will be doing double duty as CEO of Twitter and Square under a special arrangement.
The fact that Twitter – which is suffering from a major slowdown in growth and user engagement – will have to share its CEO, instead of having someone who can devote their full-time attention to revamping the company, is clearly causing some misgivings among investors.
Several analysts published notes on Thursday morning, following a report in Recode that Dorsey’s appointment was imminent, praising Dorsey but flagging concerns about the dual CEO arrangement.
Dorsey’s two CEO jobs is “not ideal” wrote Monness, Crespi & Hardt analyst James Cakmak in a note, according to Barron’s.
Citi analyst Mark May wrote that he would take a “generally positive view” if Dorsey becomes Twitter’s permanent CEO, but he said it would raise several important questions including “Given that Dorsey has been heavily involved with Twitter since its founding, does this actually represent a meaningful enough change?” and “How will Dorsey balance the responsibilities of permanently running two large companies at the same time?”
Dorsey has been serving as interim CEO at Twitter ever since Dick Costolo resigned in June. Twitter shares have plunged roughly 30% since Costolo’s departure and are now trading below their IPO price.
Twitter shares finished Thursday’s regular session at $24.68.