Years of weak management and weak corporate governance are the reasons why Twitter is in the mess it is in.
Twitter has been social media’s weak sibling since its inception, trailing some combination of Facebook/Instagram and TikTok for over a decade. The fact that Twitter is in the position it is in is hardly a surprise given it was led for most of its existence by its founder and part-time CEO Jack Dorsey until November 2021. The part-time CEO gig does not work. Shareholders should have shown Mr. Dorsey the door years ago when he initially floated the part-time CEO idea, especially given that he had not earned the right (Mr. Dorsey wasn’t exactly Steve Jobs during the latter’s second stint as Apple CEO).
Fast forward to this week and Elon Musk has lobbed in an offer to acquire Twitter. Rather than negotiate with Mr. Musk, Twitter’s empty suit CEO (Parag Agrawal), and Board moved immediately to adopt a shareholder rights plan (the shareholder does not have rights under these “poison pill” plans), to fend off Mr. Musk. In short, poison pill defenses dilute shareholders to make target companies appear less attractive to would-be acquirers. Twitter created its own mess after years of product neglect. Twitter’s lack of product focus, direction and innovation are the reason why Twitter will be a perpetual “also ran”. Twitter’s lack of focus is a symptom of Mr. Dorsey’s lack of focus.