Could Twitter Inc (NYSE:TWTR) be the subject of a fierce tussle with activist investors in the coming weeks? That is the question that many investors and analysts will be asking in the wake of the giant social network’s co-founders teaming up to defend under siege CEO, Dick Costolo.
Recode is reporting that two weeks ago co-founders, Jack Dorsey and Evan Williams, at a tea time meeting with the company’s employees teamed up to affirm support for the under fire Costolo. The executive’s message was simple that they and the board remained super supportive of the embattled CEO. The remarks come in the wake of Twitter Inc (NYSE:TWTR) being the subject of increased scrutiny from Wall Street and investors over lackluster product innovation, as well as worries concerning user’s growth.
The co-founders are believed to have told staffers that they believed in how Costolo was running the company amidst mounting pressure. Dorsey also took to his Twitter Inc (NYSE:TWTR) account to defend the under fire CEO a clear indication that all may not be right as pressure continues mount from all quarters.
The noisy support raises questions as to whether Twitter Inc (NYSE:TWTR) may the subject of potential attacks from activist investors who may have lost patience with how the social platform was being run. Once this campaign starts, it can be extremely hard for the company to shut it down thus the reason the executives are trying to clamp it down before it gets any legs.
CNBC’s, Jim Cramer, who has for some time been supportive of Costolo, seems to have changed his sentiments a clear indication that he is not happy with how the company was being run. Some insiders believe Twitter Inc (NYSE:TWTR) remains vulnerable to attacks especially from activist investors as the company does not have any dual-class stock structure.
Costolo will not be the first CEO to come under scrutiny from activist investors. Yahoo! Inc. (NASDAQ:YHOO)’s Marissa Mayer has been the subject of increased activist investor pressure in relation to the company’s stakes in Alibaba Group Holding Ltd (NYSE:BABA).
Investors at Twitter Inc (NYSE:TWTR) will eagerly wait to see the kind of results that will be posted this week as it is sure to have a huge bearing on how the Street reacts towards the company.