Twitter’s Costolo steps down; shares go up
A string of unimpressive results have prompted Twitter executive Dick Costolo to step down
Dick Costolo has resigned as chief executive of Twitter, and is to be replaced by Jack Dorsey. Since the news broke Twitter shares shot up by seven percent
Twitter announced on June 11 that, after five years spent in the role, the company’s chief executive Dick Costolo has stepped down. The news follows a series of below-par results, the most notable of which perhaps being in April, when the company stopped short of Wall Street forecasts for revenue growth and racked up a net loss of $162m for the year. After struggling with user growth for little over a year and half now, Costolo decided that the time was right to stand aside.
The news was greeted positively by investors; with Twitter’s shares up more than seven percent in after hours trading
The news was announced first via a tweet, which read: “Our CEO, @dickc, will step down as CEO and we’ll welcome @jack as Interim CEO on July 1.” Jack Dorsey, who is the company’s co-founder and Chairman of the Board, will serve as Interim CEO while the board conducts its search for a successor.
“I am tremendously proud of the Twitter team and all that the team has accomplished together during my six years with the Company”, said Costolo in a statement. “There is no one better than Jack Dorsey to lead Twitter during this transition. He has a profound understanding of the product and Twitter’s mission in the world as well as a great relationship with Twitter’s leadership team.”
The news was greeted positively by investors; with Twitter’s shares up more than seven percent in after hours trading. Yet questions remain about whether the social media company can successfully monetise its services and boost its user base. eMarketer estimates put the company’s monthly user base growth at barely over 14 percent this year, down from 30 percent two years ago. Looking as far forward as 2019, the market research company believes the company’s global user growth will slump to six percent.
Twitter has long flaunted one billion users as its long-term target, yet they barely number over 300 million currently, with its best days, in terms of growth, almost certainly behind it. With growth off to a slow start this year and its shares trading at a price lower than at its debut, many analysts are cautious – if not pessimistic – about the company’s prospects.
