Investors, especially institutional investors, are losing confidence in Twitter Inc (NYSE:TWTR) CEO, Dick Costolo, as they believe that he is not doing enough for the company. More recently, an analyst at Sun Trust, Robert Peck said that Twitter CEO may not be there in a year and there is a good chance for it. Peck said when it comes to Costolo’s presence, it’s the No.1 priority when he talks to institutional investors.
One of the shareholders already told Business Insider’s Jay Yarow that Costolo should not be running the company anymore. Earlier in November, Allianz Global Technology Fund’s Walter Price, who has been selling Twitter stock, also told the Wall Street Journal that people are losing confidence in Costolo.
One of the key reasons is Twitter Inc (NYSE:TWTR)’s poor stock performance standalone as well as compared to its social media peers. The stock has fallen nearly 40% year to date, which is comparable to Facebook Inc (NASDAQ:FB)’s 49% gains and LinkedIn Corp (NYSE:LNKD)’s 7.5% gains during the same period.
In addition, Twitter’s micro-blogging platform is also losing ground against the newer social media platforms and mobile social messaging apps. Recently, Facebook-owned Instagram surpassed Twitter in terms of total number of users and also reported much better user engagement and experience compared to twitter.
Management churn under Costolo’s leadership is also a reason behind investors’ aggravation. At least five top executives, including the CFO and the product chief, have left the company through the last year.
However, Twitter Inc (NYSE:TWTR)’s 3Q14 revenue grew 114% and the company continues to hold a lot of revenue generating businesses, having huge sales potential. Costolo has also done significant job in stabilizing Twitter as a start-up venture and taking it through its IPO.
In 2015, it will be of interest to see whether Costolo gets a triumph card to convince investors with its growth plan or investors gets the upper hand to push Costolo considering stepping down or resigning.