“Enough already,” writes NYU Stern School of Business professor Scott Galloway this week in an open letter to Twitter board chairman Omid Kordestani.
Galloway, a Twitter shareholder (334,000 shares, currently worth more than $10 million) is talking about Jack Dorsey; he wants him out as Twitter CEO. And he lays out a compelling case based on poor stock performance, user growth, monetization, management, and even Dorsey’s personal plans for 2020.
Since June 2015, when Dorsey returned to be CEO of the company he cofounded, Twitter (TWTR) stock is down 16%, while Facebook is up 140%, Google is up 150%, and the S&P 500 has risen 50%.
“Twitter has, on every metric, underperformed peers for several years,” Galloway writes. “This decline is despite the fact... that Twitter has become an iconic brand and the global heartbeat for our information age.”
Trump bump has “masked” Twitter’s failings
Galloway also makes the case that President Trump’s avid daily use of Twitter has “somewhat wallpapered over” Twitter’s business failings. Trump’s use of Twitter as the White House’s megaphone “creates a sugar high that masks the underperformance of management, and will not last,” Galloway says. “Few people have benefited more from Donald Trump’s election than Jack Dorsey.”
That last claim is shakier than the hard numbers, since some could argue that Trump’s tenure has not been kind to Twitter, Facebook, or Google in that the 2016 election brought more scrutiny and criticism to those companies and their open platforms.
Dorsey’s bitcoin obsession will bring him to Africa for 3-6 months
Remember: Dorsey is CEO of both Twitter and Square, two publicly traded companies that have had very different runs in the past two years. Square’s (SQ) stock rose 72% in 2018 and was Yahoo Finance’s Company of the Year, and rose 18% in 2019; Twitter is up 5% in 2019.
The final straw appears to be Dorsey’s Nov. 27 announcement that he plans to live in Africa for 3-6 months in mid-2020. Dorsey tweeted: “Africa will define the future (especially the bitcoin one!).” Square has said it has no comment on Dorsey’s plans beyond his tweet.
It is no surprise Dorsey mentioned bitcoin in his announcement: he has become vocal about his interest in bitcoin and launched multiple bitcoin initiatives at Square, leading some to call it a distraction.
Galloway writes, “A part-time CEO who is relocating to Africa? Enough already... It’s not Mr. Dorsey’s plans to move to Africa that constrain stakeholder value, but his plans to move back. Mr. Dorsey demonstrates a lack of self-awareness, indifference, and yogababble that have hamstrung stakeholder value.”
And Galloway’s not the only one.
Jason Kint, CEO of the nonprofit trade group Digital Content Next, tweeted, “This is the CEO of company mentioned 74x in [the] Mueller Report investigating Russia’s interference in 2016 US election. He’s moving to another continent for much of 2020 election??? And we’re [shrugging emoji] with this? WTF.”
Expect the noise to get louder in 2020
At Square, Dorsey has a unique structure in place: instead of a COO, four (it was five before the sale of food delivery startup Caviar this year) category heads (hardware, sellers, Cash App, and Square Capital) who all answer up to him. They praise his leadership, despite that it is part-time: “We meet three days a week, Jack is always there, he runs those meetings,” hardware lead Jesse Dorogusker says. “I don’t see him every day, but I wouldn’t expect to see my CEO every day. It’s a non-thing to me.”
Scott Kessler, tech and media analyst at Third Bridge, at the end of 2018 predicted Dorsey would step down as CEO from one of his two companies in 2019—but that didn’t happen. (Kessler made the same prediction for 2018.) “These companies are becoming so big and so far-flung in many respects that they do require more CEO attention than he’s probably able to afford,” Kessler told Yahoo Finance last year.
But after a tough year for Twitter in 2019, and if Dorsey follows through on his Africa movie, expect the noise to get even louder in 2020 for him to hand the reins to someone else. He could still stay on as board chairman or a boardmember, after all. Or he could step down as Square CEO and focus on Twitter. Shareholders are going to keep calling for one of the two to happen. Dorsey leaving the top job at Twitter looks likelier.
Daniel Roberts is a senior writer and show host at Yahoo Finance, and closely covers tech. Follow him on Twitter at @readDanwrite.