Jack has emerged from a harrowing week, shorts intact. Over the past several days, the tech world was forced to consider what would happen if its Yoda-like executive with mysterious travel plans and weird vendetta against Mark were to fall from grace as Jack Dorsey, CEO of both Twitter and Square to just Jack Dorsey, CEO of Square.
The GOP-backing vampiric hedge fund Elliott Management had bought up an over-four per cent stake in Twitter, set Jack in its crosshairs, and nominated four new board directors. Jack was dead. But according to the New York Times, a new entrant with $US1 ($2) billion appears to have bailed him out in the nick of time. Long live Jack, maybe.
Elliott Management’s storied history of sucking profits from wounded institutions most notably includes making away from Argentina’s economic crisis with $US2.4 ($4) billion of bonds. (They’ve also lately set their sights on blemished WeWork investor Softbank). The Times reported that Elliott Management struck the bargain to keep Jack under the condition that Twitter sold a $US1 ($2) billion stake to the tech investor Silver Lake, which, along with Elliott Management, will be taking seats on the board. According to Twitter, the company will use Silver Lake’s investment in part toward buying back $US2 ($3) billion of its own stock.
Why go after Jack? Coordinated disinformation campaigns that plague the site? Not so much–calling to oust Jack is a move right out of Elliott Management’s playbook, as detailed in a 2018 New Yorker profile of EM head Paul Singer:
The firm has many kinds of investments, but Singer is best known as an “activist” investor, using his fund’s resources—about thirty-five billion dollars—to buy stock in companies in which it detects weaknesses. Elliott then pressures the company to make changes to its business, with the goal of improving the stock price. Elliott’s executives say that most of their investment campaigns proceed without significant conflict, but a noticeable number seem to end up mired in drama. A signature Elliott tactic is the release of a letter harshly criticising the target company’s C.E.O., which is often followed by the executive’s resignation or the sale of the company.
Precarious stock prices, check. Weaknesses, no doubt. Twitter blamed ad-targeting bugs for hundreds of millions of dollars of losses from projected revenue last year.
The Times reports that Elliott Management’s primary concern seems to be Jack’s decision to split his time as CEO of Square. (He recently cancelled a months-long trip to Africa, where he was likely going to work on Square. He launched Square in 2010 after he was booted from Twitter for the first time back in 2008. At the time, the platform then suffered constant disruptions. He was reportedly spending too much time on fashion design and yoga. He returned in 2015.)
Partner Jesse Cohn told the Times that he would like Twitter to make more money, essentially:
“We invested in Twitter because we see a significant opportunity for value creation at the company. I am looking forward to working with Jack and the board to help contribute to realising Twitter’s full potential.”
Not “potential” to stem systemic conspiracy-mongering, which Twitter has tremendous potential to do, and demonstrated over the past 24 hours that it can if it chooses to. On Sunday, Twitter finally placed its “manipulated media” warning label on White House social media director Dan Scavino’s misleadingly edited video of Joe Biden, which Donald Trump retweeted. (Biden says “we can only reelect Donald Trump,” and the video cuts off before he goes on to say: “We can only reelect Donald Trump if in fact we get engaged in this circular firing squad here.”)
But at this writing, well into Monday morning, the “manipulated media” label only applies when the tweet appears in users’ timelines, meaning that it doesn’t show up on Trump’s profile, or in isolation such, making the label effectively useless unless you have a Twitter account and happen to have caught it from someone who tweeted it. Twitter announced its “synthetic and manipulated media” policy over a month ago, reasonably leading us to wonder what the hell Twitter is doing all day.
When asked when the company plans to resolve the issue, Twitter told Gizmodo that they are working on a fix and will keep us updated.
There are no heroes. Jack sees another day, albeit in the long shadow of ghoulish investors.