Why Twitter Inc (TWTR) Stock Desperately Needs a “Real” CEO to Back It Up

What a change a new year can bring! After being the butt of jokes on Wall Street, Twitter Inc (NYSE:TWTR) has seemingly got its act together. After a series of disasters in the markets, TWTR stock has pleasantly surprised investors. On a year-to-date basis, the embattled social media company is up 22%, shaking off early volatility. But in order to keep the fire burning, Twitter has to make a difficult decision.

Why Twitter Inc (TWTR) Stock Desperately Needs a "Real" CEO to Back It Up

A few days ago on July 11, TWTR announced that Ned Segal, who previously worked for Intuit Inc. (NASDAQ:INTU) and Goldman Sachs Group Inc (NYSE:GS), would take over as the chief financial officer.

Anthony Noto, who was “two-timing” as both CFO and COO, will assume just the operational role. The announcement is a welcome one for Twitter stock. Now, all it needs is for CEO Jack Dorsey to make a pick.

In case you haven’t heard, Dorsey, who co-founded Twitter, was appointed as the permanent head in late October 2015. He also is the CEO of Square Inc (NYSE:SQ), a rapidly growing mobile payment processing firm. Both companies are well-known to the world. Square leverages the cashless-society revolution. TWTR stock is an integral, foreign-policy investment. But only one is successful.

Since its initial public offering, Twitter stock has lost roughly 52%. In sharp contrast, SQ has gained 104% over its IPO price, and that was in November of 2015. To truly turn things around for TWTR, Jack Dorsey must go all in, or let someone else do the job.

Here are a few reasons why TWTR stock investors need a “real” CEO:

TWTR: Two-Timing Is Frowned Upon

As a “regular” office worker in corporate America, nothing stops you from having two full-time jobs. However, if anyone discovered your plans, it would likely be universally frowned upon.

Obviously, the logistics are not feasible. Virtually all corporate jobs are nine-to-five affairs, not five to one in the morning.

But the more problematic obstacle is that your employer has made an investment in you. Sometimes, on-the-spot situations require extra hours to resolve. You can’t leave your team hanging while you bust out early for your other commitment.

If two-timing is bad for business at the lower levels, why is it good for Jack Dorsey and TWTR stock?

Not Fair to Twitter Stock Owners

When the social media company’s board of directors decided to accept Jack Dorsey as a dual CEO, it had reservations. The wunderkind engineer convinced the board, however, that “only a founder would have the moral authority to truly shake up a company that has been struggling to attract new users and compete for advertising dollars,” according to The New York Times.

Twitter stock initially jumped on the announcement, and for some months, enthusiasm abounded. But that joy quickly evaporated, with 2015 closing out another terrible year. The following year wasn’t much better.

But now that TWTR stock is on the verge of a genuine breakthrough — its first full-year positive return — they need dedicated leadership, not “moral authority.” Shareholders are giving their best; it’s time that Twitter, and perhaps Jack Dorsey, do the same.

Questionable Benefit for TWTR Stock

One of the world’s greatest entrepreneurs, Steve Jobs, was once CEO of both Apple Inc. (NASDAQ:AAPL) and Pixar. As much of a genius as Jobs was, he absolutely hated the dual responsibilities. According to biographer Walter Isaacson, Jobs said, “It was rough, really rough, the worst time in my life.”

The iconic Apple founder further claimed that this period in his life may have led to his devastating health problems. “It got close to killing me. I was driving up to Pixar and down to Apple in a black Porsche convertible, and I started to get kidney stones. I would rush to the hospital and the hospital would give me a shot of Demerol in the butt and eventually I would pass it.”

That hardly sounds appealing for either Jack Dorsey or Twitter. The reality is that in this era of pink-slipping — something that Dorsey knows all about — everything is tasked to do more. But at a certain point, the ROI on pushing oneself over the limit declines dramatically.

Great Players Aren’t Necessarily Great Coaches

Many professional athletes pursue coaching once their playing careers are over. Sometimes this works, but other times, it doesn’t. Although similar, these are two disciplines that require different skill sets.

Giving too much credit to Jack Dorsey for leading Square is risky if you don’t counterbalance with Twitter. SQ was likely going to move up anyways because cashless — and digitalization in general — is the go-to trend. Square also solves a problem, and its mobile payment device sells itself.

Twitter, on the other hand, is a problem. While it’s incredibly popular with the President and Hollywood celebrities, social media is such a here today, gone today world. Does anybody remember MySpace? Providing value for TWTR stock is the ultimate challenge for any head executive.

Unfortunately, half of a Jack Dorsey isn’t going to cut it anymore.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/07/twitter-inc-twtr-stock-desperately-needs-real-ceo/.

©2022 InvestorPlace Media, LLC