Twitter Surges on Reports Elliott Takes $1 Billion Stake, Eyes Dorsey Replacement

Elliott Management has built a significant stake in Twitter and is potentially looking to replace CEO Jack Dorsey, reports say.
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Twitter Inc  (TWTR) - Get Report shares surged higher in pre-market trading Monday after multiple media reports suggested activist investors Elliott Management Corp have built a significant stake in the micro-blogging site and are potentially looking to replace CEO Jack Dorsey.

Elliott has taken a $1 billion stake in Twitter, the Wall Street Journal reported over the weekend, while Reuters has said Paul Singer, the fund's founder, is looking to install selected nominees to Twitter's eight-member executive board. Bloomberg first reported the Elliott stake Saturday, citing people familiar with the matter.

Dorsey, who part-founded Twitter in 2006, also serves as CEO of mobile payments company Square Inc.  (SQ) - Get Report, and could be vulnerable to a change of leadership, the reports have suggested. given Twitter has only one class of stock and the 43-year only owns around 2% of the company's outstanding float. 

Twitter shares were marked 8.4% higher in pre-market trading Monday to indicate an opening bell price of $35.97 each.

Last month, 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.