Twitter Inc. (TWTR) reached an agreement with activist investors Elliott Management and Silver Lake Monday, and pledged to buyback $2 billion in stock, in a pact that likely keeps co-founder Jack Dorsey as CEO.
Twitter said the agreement includes a $1 billion investment from Silver Lake, that will partly fund the buyback, while Elliott, which owns a 4% stake in the mico-blogging site, will place managing partner Jesse Cohn, along with Silver Lake's Egon Durban, onto Twitter's executive board.
The agreement, however, also pledged "evaluate the CEO succession plan" with Dorsey and "and make recommendations consistent with corporate governance best practices with respect to the elimination of the Company's staggered board."
"Twitter serves the public conversation, and our purpose has never been more important. Silver Lake's investment in Twitter is a strong vote of confidence in our work and our path forward," said CEO Jack Dorsey. "They are one of the most respected voices in technology and finance and we are fortunate to have them as our new partner and as a member of our Board."
"We welcome the support of Egon (Durban) and Jesse (Cohn), and look forward to their positive contributions as we continue to build a service that delivers for customers, and drives value for stakeholders," he added.
Twitter shares were marked 3.44% lower in pre-marked trading, compared to a potential decline of around 7% for the Nasdaq, to change hands at $32.29 each.
Earlier this month, multiple media reports suggested Elliott Management was looking to replace Dorsey and install selected nominees to Twitter's eight-member executive board.
In late January, Twitter said fourth quarter revenues topped the $1 billion mark for the first time ever, as users returned to its platform amid efforts to reduce hate speech and abusive posts.
Adjusted earnings, however, for the three months ending in December came in at 17 cents per share, down more than 50% from the same period last year and 5 cents shy of the Street consensus forecast, raising further questions over the tech group's profitability.