Twitter Inc and activist hedge fund Elliott Management Corp on Monday announced, in its latest agreement, that would keep Twitter CEO Jack Dorsey in place.
The agreement calls for the social media company to shake up its management. Twitter appointed two new board members while searching for a third, independent director.
The company has also pledged to repurchase $2 billion worth of shares over time in a buyback program. For this, the company has received a $1 billion funding from technology-focused investor Silver Lake.
“Twitter Inc (NYSE: TWTR) today announced that Silver Lake, a global leader in technology investing, will make a $1 billion investment in Twitter. Twitter also entered into a Cooperation Agreement with Elliott Management Corporation (“Elliott”), an investment firm whose affiliated funds own approximately 4% per cent of the Company’s common stock and economic equivalents. The Company expects to use Silver Lake’s investment, together with cash on hand, to fund a $2 billion share repurchase program that will be executed over time,” Twitter said in an official statement.
The two new board members who have been appointed as part of the new agreement are Egon Durban, co-CEO and managing partner of Silver Lake, and Jesse Cohn, a partner at Elliott.
Jack Dorsey, co-founder and CEO, said, “Twitter serves the public conversation, and our purpose has never been more important. Silver Lake’s investment in Twitter is a strong vote of confidence in our work and our path forward. They are one of the most respected voices in technology and finance and we are fortunate to have them as our new partner and as a member of our Board. We welcome the support of Egon and Jesse, and look forward to their positive contributions as we continue to build a service that delivers for customers, and drives value for stakeholders.”
The US-based Hedge Fund and activist investor Elliott Management Corp in February amassed a massive stake in the company. According media reports, the hedge-fund post-investment was seeking to make some major changes as it has done in the past with companies such as e-bay. This included the potential removal of the social media giant’s CEO, Jack Dorsey according to a Reuters report.
Elliott amassed a 4 per cent stake in Twitter according to Twitter’s official statement.
The micro-blogging platform also shared its ambitions for 2020.
“The ambition in 2020 and beyond is to grow mDAU at 20 per cent or more, and looking beyond 2020, to accelerate revenue growth on a year-over-year basis and gain share in the digital advertising market as Twitter continues to invest to drive growth,” it said in its statement.
The company will release a detailed strategy for growth moving forward in the fall of 2020.