Twitter and activist hedge fund manager Elliott Management agreed to a truce on Monday that leaves its co-founder and chief executive Jack Dorsey in place but shakes up the company’s board.
Elliott, a New York-based activist investor founded by billionaire investor and philanthropist Paul Singer, had taken a $1bn stake in Twitter.
Under the agreement Twitter will appoint two new board members and has promised to search for a new independent director. Twitter will also buy back $2bn in shares, the company said. The buyback will be funded in part by a $1bn investment from the technology-focused investment firm Silver Lake.
Elliott Management had been concerned about Dorsey’s dual role as CEO of Twitter and Square, a financial technology company he also co-founded and where he also serves as chief executive.
Last year Dorsey also announced plans to move to Africa for up to six months this year following a month-long trip visiting entrepreneurs on the continent.
“Sad to be leaving the continent … for now. Africa will define the future (especially the bitcoin one!),” Dorsey tweeted from Addis Ababa. “Not sure where yet, but I’ll be living here for 3-6 months mid 2020. Grateful I was able to experience a small part.”
Last week Dorsey obliquely defended his stewardship of Twitter at a Morgan Stanley conference. “I need to re-evaluate” the plan to work from Africa “in light of Covid-19 and everything else going on”, he said.
Twitter has been criticized for its slow pace on innovation and especially for its decision to close Vine, a popular short-form video app that was a precursor to the wildly popular TikTok.
“Some people talk about the slow pace of development at Twitter. The expectation is to see surface level changes, but the most impactful changes are happening below the surface,” Dorsey told the conference.
Twitter has only one class of stock, unlike most of its peers where the founders keep control of the company by owning shares that have greater voting rights than those held by later investors.
Elliott Management has a long history of pushing for change in tech, telecoms and other companies including AT&T and eBay. Among its other current targets is SoftBank, the Japanese conglomerate that bet heavily on office-sharing startup WeWork.