Twitter Shares Edge Higher As Company Report Endorses CEO Jack Dorsey

Twitter's board of directors formally endorsed CEO Jack Dorsey following an agreement with activist investors Elliott Management and Silver Lake into the CEO role at the micro-blogging website.
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Twitter Inc.  (TWTR) - Get Report edged higher Tuesday after an investor-lead study of the group's leadership team gave its support to CEO Jack Dorsey. 

The report, which was triggered by pressure from activist investors Elliott Management and Silver Laker Partners earlier this year and their concern for Dorsey's role as both CEO of Twitter and payments group Square Inc.  (SQ) - Get Report , ultimately 'assessed the current management structure, new operating plan and procedures put in place by the Company’s CEO, as well as the Company’s significantly improving product, operational and financial performance through the most recently reported quarter," according to a filing with the Securities and Exchange Commission.

"The Committee expressed its confidence in management and recommended that the current structure remain in place," Twitter said.

The formal support for Dorsey from Twitter's Board of Directors followed a spring agreement that included a $1 billion investment from Silver Lake to partly fund a $2 billion share buyback and permission for Elliott to place managing partner Jesse Cohn, along with Silver Lake's Egon Durban, onto Twitter's executive board. 

The report also recommended reducing the tenure of Board members from three years to one, a move that could make it easier for Elliot, as well as other activist investors, to make quicker changes to its composition.

Twitter shares were marked 1.72% higher in pre-market trading Tuesday to indicate an opening bell price of $40.15 each. 

Last week, however, Twitter shares suffered one of their biggest declines in five years after posting better-than-expected third quarter earnings while noting that its own measure of user growth missed Wall Street forecasts.

Twitter said that its metric of 'monetizable daily active users' (mDAU) rose 29% from last year to 187 million, with U.S. figures rising 20% to 36 million and international totals rising 32% to 152 million. The overall Refinitiv forecast for mDAU was 195.2 million.

That clouded a 14% gain in overall revenues, which topped $936 million, and a third quarter bottom line of 19 cents per share.