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How Can Twitter Inc (TWTR) Stock Turn Itself Around Without Any Leaders?

The exodus of TWTR execs leaves no room for strategic improvements

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Who’s Gone for Twitter

In the last year, Twitter has seen an incredible number of executive departures. A partial list:

  • In January 2016, five executives leave, including the vice presidents of product, engineering, and human resources. In response, COO Adam Bain — promoted just three months earlier — and Chief Technology Officer Adam Messinger are given additional responsibilities.
  • In May, Jana Messerschmidt, head of global business development, and Head of Global Media Nathan Hubbard both depart. Their positions are “consolidated,” according to The Wall Street Journal, with a single employee promoted to take both jobs.
  • Bain leaves in November. CFO Anthony Noto adds COO to his duties.
  • Messinger — like Bain, pulling something close to double duty — follows in December. He is joined by VP Product Josh McFarland, who himself had replaced Kevin Weill, one of the group to resign just eleven months earlier.
  • Last week, the exit of Kathy Chen, managing director of Greater China, was disclosed. While Twitter is blocked in China, the company was working on targeting in-country advertisers to spend outside the mainland. Twitter stock falls on the news.

It’s a stunning list, with literally over half of Twitter’s top executives gone within a year. And this isn’t a new problem. BTIG analyst Rich Greenfield Tweeted in January 2016 that eight of 13 presenters at the company’s 2014 Analyst Day had left the company over the following 14 months.

And it raises the question: how is Twitter supposed to manage itself when its managers are either fleeing the company, or overworked by doing the jobs of their departed former peers? And how can TWTR stock appreciate if its executives don’t even have time to plan strategy?

Who’s Left

Twitter now lists just six executives on its “leadership team” page — one of whom is Messinger, the now-departed CTO. Its CEO, Jack Dorsey, is also the CEO at Square Inc (NYSE:SQ). That’s an arrangement that simply doesn’t get enough attention. Dorsey is like Bo Jackson — only if he were playing football and baseball at the same time.

But Dorsey also is clearly stretched, and given the attrition in the rest of the team, that seems a concern. Twitter’s problems are more than enough for a full-time CEO, particularly given the workload of the rest of the executive team. Noto is COO and CFO. General Counsel Vijaya Gadde took over corporate communications in 2015, until Natalie Kerris was hired from Apple Inc. (NASDAQ:AAPL) early last year. Kerris lasted six months; after she left, Twitter added PR to the plate of Chief Marketing Officer Leslie Berland.

The consistent revolving door of talent and responsibilities calls into question any possible turnaround for Twitter. That’s bad news for Twitter stock, given that it is severely overpriced on any true earnings measure.

Twitter executives don’t have time to plan strategy, given their workloads (Jack Dorsey included). It’s hard, if not impossible, to implement new products without an actual VP of product who has been at the company for more than a few months. Branding suffers when the chief marketing officer must put out endless PR fires as well.

For TWTR stock to gain, Twitter has to improve its operations, its revenue, and its profits. That isn’t possible if Twitter executives have to do two or three jobs at once.

As of this writing, Vince Martin had no positions in any stocks mentioned.

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