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Thursday, March 28, 2024

Twitter strikes deal with Elliott

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Twitter strikes deal with Elliott
Twitter strikes deal with Elliott

Twitter CEO Jack Dorsey survived an attempt to remove him after the social media company struck a deal with activist hedge fund Elliott Management.

Fred Katayama reports.

Twitter CEO Jack Dorsey is staying put.

The prominent entrepreneur survived an attempt to remove him from the company he co-founded after Twitter struck a deal with activist hedge fund Elliott Management.

Founded by billionaire Paul Singer, Elliott had sought to remove Dorsey and install its own nominees to the social media company's board, according to sources.

Under the deal announced Monday, the private equity firm Silver Lake will invest $1 billion in Twitter, which will then use that to buy back $2 billion of its own shares.

And Silver Lake's co-CEO and a partner at Elliott will join Twitter's board.

Elliott has a 4% stake in Twitter.

What makes Twitter's set up rather unusual is that Dorsey heads the company he co-founded but does not control it.

He's vulnerable to challenges by activist investors like Elliott because the company gives shareholders equal voting rights.

Dorsey owns a 2% stake in Twitter.

What's more, he also runs another company he co-founded, the mobile payments firm, Square.

Twitter shares rose 3% in early trading Monday despite a broad market sell-off.

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